It’s an underpublicised truth that a Bishopston residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Bishopston property market.Once your lease nears 85ish years, you should start considering 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 lower than 80 years - otherwise a higher amount will be due. Most leasehold owners in Bishopston will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer from beginning to end of the process.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service will provide you better control over the value of your Bishopston leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Following lengthy discussions with the landlord of her studio apartment in Bishopston, Jade commenced the lease extension process just as the lease was nearing the critical 80-year mark. The lease extension completed in April 2009. The landlord’s fees were negotiated to a tad over 650 GBP.
Mr and Mrs. P Thomas took over the lease of a first floor apartment in Bishopston in August 2010. The question was if we could approximate the premium would likely be for a ninety year extension to my lease. Comparable properties in Bishopston with a long lease were valued about £220,400. The average ground rent payable was £45 invoiced per annum. The lease concluded on 10 April 2090. Considering the 64 years left we calculated the premium to the landlord to extend the lease to be between £15,200 and £17,600 not including fees.
Last September we were contacted by Mr and Mrs. E Petit , who purchased a one bedroom flat in Bishopston in March 2000. We are asked if we could shed any light on how much (approximately) premium would likely be to prolong the lease by 90 years. Identical flats in Bishopston with 100 year plus lease were valued about £270,000. The average amount of ground rent was £55 invoiced yearly. The lease finished in 2101. Considering the 75 years remaining we calculated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus professional charges.