Bexley leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. It is the case that most Bexley tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Bexley you must see if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is generally accepted that a residential leasehold with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for many years in the future.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancers that we work with handle Bexley 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 lawyer we work with provide it.
During the course of the last few months Gabriel, came very close to the 80-year mark with the lease on his first floor apartment in Bexley. Having purchased his property twenty years previously, the lease term was of minimal concern. As luck would have it, he became aware that he would soon be paying an escalated premium for Extending the lease. Gabriel arranged for a lease extension just in the nick of time last June. Gabriel and the landlord who owned the flat above in the end settled on the final figure of £5,500 . If the lease had fallen lower than 80 years, the premium would have become more costly by at least £925.
In 2010 we were e-mailed by Mr and Mrs. F Sharif who, having was assigned a lease of a first floor flat in Bexley in March 2009. We are asked if we could approximate the price would be to extend the lease by an additional years. Comparative homes in Bexley with an extended lease were in the region of £205,000. The average ground rent payable was £50 collected every twelve months. The lease ended in 2104. Given that there were 78 years unexpired we calculated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus expenses.
An example of a Lease Extension case for a Bexley residence is 103a Footscray Road in January 2014. The tribunal determines that the premium payable for the extended lease should be £34,500 according to the expert witness valuation calculation This case was in relation to 1 flat.