If you are facing a significant premium because your lease in Bletchley has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Why you should start your Bletchley lease extension today:
Increase your lease and increase your Bletchley property value
Bletchley leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Bletchley tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Bletchley you must see if your lease has between seventy and ninety years left. There are good reasons why a Bletchley flat owner with a lease having around 80 years remaining should take steps to ensure that a lease extension is put in place without delay
An extended lease is almost the same value as a freehold
It is generally considered that a residential leasehold with more than 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
Banks and Building Societies may not issue a mortgage on a short lease
The definition of a short lease varies by mortgage company, yet lending institutions start to get nervous at around 75 years. This may be problematic as and when you come to dispose of or refinance your flat as it will be effectively unmortgageable. Even though you might have no immediate intention to sell but when you do your purchaser must wait two years before being able to start the legal procedures for a lease extension.
| Lender |
Requirement
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|---|
| Halifax |
Minimum 70 years from the date of the mortgage.
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| 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
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| TSB |
Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.
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| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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| 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.
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What makes us experts in Bletchley lease extensions?
The lawyers that we work with procure Bletchley 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.
Bletchley Lease Extension Case Studies:
Holly, Bletchley, Buckinghamshire,
Off the back of lengthy correspondence with the freeholder of her studio apartment in Bletchley, Holly initiated the lease extension process just as her lease was approaching the critical eighty-year threshold. The lease extension was concluded in September 2012. The landlord’s costs were kept to an absolute minimum.
Bletchley case:
Mrs B Mason purchased a first floor flat in Bletchley in March 2006. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by ninety years. Similar flats in Bletchley with an extended lease were in the region of £255,000. The average ground rent payable was £50 billed annually. The lease terminated in 2097. Taking into account 71 years left we estimated the premium to the landlord to extend the lease to be between £9,500 and £11,000 plus costs.
Bletchley case:
In 2010 we were called by Dr U Nelson who, having moved into a one bedroom apartment in Bletchley in September 2005. The question was if we could approximate the premium would likely be to extend the lease by an additional years. Similar premises in Bletchley with an extended lease were worth £254,200. The average ground rent payable was £60 collected annually. The lease elapsed on 27 February 2077. Given that there were 51 years left we approximated the compensation to the landlord for the lease extension to be within £43,700 and £50,600 plus legals.