When it comes to long leasehold property in Bermondsey, you are in fact renting it for a certain amount of time. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you should consider a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly especially once there are fewer than eighty years left. Residents in Bermondsey with a lease nearing 81 years left should seriously think of extending it without delay. Once the lease term has below eighty years outstanding, under the current statute the freeholder can calculate and demand a larger premium, assessed on a technical computation, strangely termed as “marriage value” which is due.
Leasehold residencies in Bermondsey with in excess of one hundred years outstanding on the lease are often referred to as ‘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 purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| 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. |
The lawyers that we work with handle Bermondsey lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Dexter owned a conversion flat in Bermondsey being sold with a lease of just over 72 years unexpired. Dexter on an informal basis spoke with his landlord a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £100 annually. No ground rent would be due on a lease extension were Dexter to invoke his statutory right. Dexter obtained expert legal guidance and was able to make an informed judgement and deal with the matter and sell the property.
Last month we were contacted by Mr and Mrs. A Nguyen , who was assigned a lease of a purpose-built flat in Bermondsey in February 2004. We are asked if we could approximate the premium would likely be to prolong the lease by an additional years. Identical homes in Bermondsey with an extended lease were valued about £285,000. The mid-range amount of ground rent was £45 billed annually. The lease expired in 2095. Considering the 71 years left we calculated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 plus costs.
An example of a Freehold Enfranchisement case for a Bermondsey flat is 1-41 Royal Tower Lodge 40 Cartwright Street in April 2013. the tribunal adding the agreed value of capitalised ground rents and the reversion the price to be paid for the freehold was £1,187,000 This case affected 41 flats. The unexpired term was 107 years.