It’s a harsh truth that a Bellingham residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Bellingham property prices.Where your lease has approximately ninety years left, you need to start thinking about 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 80 years - otherwise a higher premium will be payable. Most flat owners in Bellingham will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
It is generally considered that a residential leasehold with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Using our service will provide you enhanced control over the value of your Bellingham leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Isaac owned a studio apartment in Bellingham on the market with a lease of fraction over 59 years left. Isaac informally contacted his landlord being a well known Manchester-based freehold company for a lease extension. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £50 per annum. Ordinarily, ground rent would not be due on a lease extension were Isaac to exercise his statutory right. Isaac procured expert advice and secured an acceptable deal informally and sell the property.
In 2010 we were e-mailed by Mr and Mrs. G Collins who, having purchased a studio apartment in Bellingham in November 2011. We are asked if we could estimate the premium would likely be to extend the lease by a further 90 years. Comparative flats in Bellingham with an extended lease were worth £200,800. The average ground rent payable was £65 collected every twelve months. The lease terminated in 2085. Having 60 years remaining we estimated the premium to the landlord to extend the lease to be between £20,900 and £24,200 plus costs.
An example of a Freehold Enfranchisement matter before the tribunal for a Bellingham premises is 75 Woolstone Road in February 2012. the decision of the Tribunal was that the appropriate amount to be paid to purchase the freehold was the sum of £17,711 . This case related to 2 flats. The remaining number of years on the lease was 68.28 and 158.