The re-sale value of a leasehold property in Bishopston is impacted by how many years the lease has left to run. If it is near to or fewer than eighty years you should envisage difficulties on re-sale, so it is recommended to arrange for a lease extension before buying. It is ideal to start the process of extending the lease is when a lease still has 82 years remaining so that all matters can be finalised well before the 80 year mark. Statute entitles Bishopston qualifying lessees to acquire a lease extension of 90 years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The purpose of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold residencies in Bishopston with more than 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 conveyancers that we work with procure Bishopston 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.
Two years ago Lucas, came very near to the eighty-year threshold with the lease on his ground floor apartment in Bishopston. In buying his home two decades ago, the unexpired term was of little interest. Thankfully, he realised he would imminently be paying an escalated premium for a lease extension. Lucas was able to extend his lease just under the wire in April. Lucas and the freeholder via the managing agents subsequently settled on an amount of £5,000 . If the lease had dropped lower than eighty years, the premium would have escalated by a minimum £975.
Mr and Mrs. K Fournier purchased a ground floor flat in Bishopston in July 2007. The question was if we could estimate the price would likely be to extend the lease by ninety years. Comparative homes in Bishopston with 100 year plus lease were in the region of £264,000. The average ground rent payable was £60 invoiced every twelve months. The lease finished in 2078. Having 53 years unexpired we calculated the premium to the freeholder for the lease extension to be within £37,100 and £42,800 exclusive of expenses.
In 2009 we were phoned by Mr and Mrs. V Pérez who, having bought a garden flat in Bishopston in January 2009. We are asked if we could approximate the price would likely be for a 90 year extension to my lease. Identical flats in Bishopston with 100 year plus lease were worth £220,400. The mid-range amount of ground rent was £45 billed yearly. The lease elapsed on 15 May 2089. Having 64 years as a residual term we estimated the premium to the landlord to extend the lease to be within £15,200 and £17,600 plus costs.