The market value of Bishopsworth leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate substantially once the unexpired lease term is less than eighty years
It is generally considered that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea 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. |
| 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. |
Using our service will provide you increased control over the value of your Bishopsworth leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 6 months of protracted correspondence with the landlord of her leasehold apartment in Bishopsworth, Jasmine initiated the lease extension process as the 80 year deadline was rapidly nearing. The lease extension was finalised in October 2012. The landlord’s costs were kept to an absolute minimum.
In 2009 we were approached by Dr Erin Bell who, having acquired a purpose-built flat in Bishopsworth in April 2006. The dilemma was if we could estimate the price would be for a ninety year lease extension. Comparative homes in Bishopsworth with an extended lease were worth £200,800. The average amount of ground rent was £65 collected annually. The lease expired in 2085. Given that there were 60 years remaining we estimated the compensation to the landlord for the lease extension to be within £20,900 and £24,200 plus legals.
In 2014 we were phoned by Dr W Martin who, having was assigned a lease of a ground floor apartment in Bishopsworth in May 2007. The dilemma was if we could approximate the compensation to the landlord could be to extend the lease by 90 years. Similar flats in Bishopsworth with an extended lease were worth £255,000. The mid-range amount of ground rent was £50 invoiced monthly. The lease expiry date was on 7 April 2096. Having 71 years left we estimated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of expenses.