On the balance of probabilities where you own a flat in Bishopston you actually own a long leasehold interest over your property
Leasehold premises in Bishopston with in excess of one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a landlord in Bishopston,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Bishopston valuers.
Last October Aarav, started to get near to the 80-year mark with the lease on his garden apartment in Bishopston. Having purchased his property 18 years ago, the lease term was of minimal bearing. As luck would have it, he became aware that he would soon be paying way over the odds for Extending the lease. Aarav was able to extend his lease at the eleventh hour last September. Aarav and the freeholder via the management company eventually agreed on sum of £5,500 . If the lease had slipped lower than 80 years, the price would have gone up by a minimum £1,025.
Last Christmas we were approach by Mr and Mrs. J Cook , who acquired a ground floor flat in Bishopston in June 2011. The dilemma was if we could approximate the premium would likely be to prolong the lease by ninety years. Comparable properties in Bishopston with 100 year plus lease were worth £193,400. The mid-range amount of ground rent was £65 invoiced annually. The lease lapsed on 13 January 2085. Considering the 59 years outstanding we calculated the premium to the freeholder for the lease extension to be between £21,900 and £25,200 plus professional charges.
In 2011 we were phoned by Mr I Campbell who, having acquired a ground floor flat in Bishopston in November 2006. We are asked if we could shed any light on how much (approximately) premium could be for a ninety year extension to my lease. Similar premises in Bishopston with an extended lease were worth £250,000. The average amount of ground rent was £50 billed every twelve months. The lease expired on 7 August 2096. Given that there were 70 years unexpired we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 not including costs.