Unfortunately that a South Brent residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the South Brent property market.Once your lease nears 85ish years, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips under eighty years - otherwise a higher premium will be payable. Most flat owners in South Brent will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer throughout the process.
Leasehold properties in South Brent with in excess of 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in South Brent,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with South Brent valuers.
Two years ago Joseph, came dangerously near to the eighty-year mark with the lease on his studio apartment in South Brent. In buying his flat twenty years ago, the lease term was of minimal concern. Fortunately, it dawned on him that he needed to take steps soon on Extending the lease. Joseph was able to extend his lease at the eleventh hour last May. Joseph and the landlord eventually settled on sum of £5,000 . If the lease had gone lower than 80 years, the price would have escalated by at least £850.
Mr and Mrs. Y Stewart took over the lease of a purpose-built apartment in South Brent in May 2008. We are asked if we could approximate the price could be to prolong the lease by an additional years. Similar flats in South Brent with a long lease were worth £183,600. The average amount of ground rent was £65 collected per annum. The lease ran out on 11 September 2083. Taking into account 57 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 plus fees.
Last Christmas we were phoned by Dr Jake Martin , who took over the lease of a studio flat in South Brent in February 2000. The question was if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by an additional years. Identical properties in South Brent with an extended lease were in the region of £245,000. The mid-range ground rent payable was £50 invoiced quarterly. The lease elapsed in 2094. Given that there were 68 years remaining we approximated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 not including legals.