It’s an underpublicised truth that a Bardsley residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Bardsley property market.Once your lease nears 85ish years, you should start considering a lease extension. If the number of years remaining drops under eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of flat owners in Bardsley will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your lawyer for the duration of the process.
Leasehold properties in Bardsley with more than 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
Retaining our service gives you enhanced control over the value of your Bardsley leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Following protracted correspondence with the landlord of her one bedroom apartment in Bardsley, Abbie initiated the lease extension process as the eighty year deadline was quickly nearing. The transaction was concluded in November 2012. The freeholder’s costs were kept to an absolute minimum.
In 2014 we were called by Dr Olivia Sharif who, having moved into a studio apartment in Bardsley in November 2005. We are asked if we could shed any light on how much (roughly) premium would likely be to extend the lease by a further 90 years. Comparable homes in Bardsley with an extended lease were valued about £295,000. The mid-range ground rent payable was £45 invoiced every twelve months. The lease came to a finish on 5 April 2100. Considering the 74 years outstanding we approximated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of legals.
In 2011 we were contacted by Mr and Mrs. S Torres who, having acquired a basement flat in Bardsley in September 2000. The question was if we could approximate the price could be for a 90 year extension to my lease. Comparative homes in Bardsley with a long lease were valued around £248,000. The mid-range ground rent payable was £65 collected annually. The lease came to a finish on 27 July 2089. Taking into account 63 years remaining we approximated the compensation to the landlord to extend the lease to be within £20,000 and £23,000 plus expenses.