Chances are that where you own a flat in Bishops Cleeve you actually own a long leasehold interest over your property
Leasehold properties in Bishops Cleeve with over 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Engaging our service gives you enhanced control over the value of your Bishops Cleeve leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
James was the the leasehold proprietor of a high value flat in Bishops Cleeve on the market with a lease of just over 61 years remaining. James informally contacted his landlord a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to an increased rent to £125 yearly. Ordinarily, ground rent would not be due on a lease extension were James to invoke his statutory right. James procured expert advice and secured an acceptable resolution informally and readily saleable.
In 2014 we were phoned by Mr and Mrs. E Roux who, having owned a one bedroom apartment in Bishops Cleeve in September 1998. The dilemma was if we could estimate the price could be for a 90 year extension to my lease. Identical flats in Bishops Cleeve with an extended lease were valued around £191,400. The average amount of ground rent was £55 invoiced annually. The lease ended on 20 September 2080. Given that there were 54 years outstanding we calculated the premium to the freeholder for the lease extension to be between £34,200 and £39,600 exclusive of professional charges.
In 2011 we were e-mailed by Mrs S Hill who, having bought a basement flat in Bishops Cleeve in May 1997. We are asked if we could approximate the premium would likely be for a 90 year extension to my lease. Similar flats in Bishops Cleeve with an extended lease were valued about £290,000. The average ground rent payable was £45 billed per annum. The lease finished on 5 May 2100. Given that there were 74 years left we estimated the premium to the landlord to extend the lease to be between £8,600 and £9,800 plus expenses.