It’s an underpublicised truth that a Bayswater residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Bayswater property market.Once your lease nears 85ish years, you need to start thinking about a lease extension. If the number of years remaining slips below eighty years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Bayswater will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold premises in Bayswater with over one hundred years left 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 premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges justify it.
| 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. |
| Halifax | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake Bayswater 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 conveyancer we work with provide it.
Trailing protracted negotiations with the landlord of her one bedroom flat in Bayswater, Naomi initiated the lease extension process just as her lease was approaching the all-important eighty-year mark. The transaction completed in August 2012. The freeholder’s costs were kept to an absolute minimum.
Last year we were called by Ms Emma Harris , who bought a basement flat in Bayswater in July 2000. We are asked if we could approximate the compensation to the landlord would be to extend the lease by ninety years. Identical premises in Bayswater with an extended lease were in the region of £255,000. The average ground rent payable was £50 invoiced quarterly. The lease finished on 24 February 2097. Taking into account 71 years left we approximated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus fees.
An example of a Lease Extension matter before the tribunal for a Bayswater flat is 93 Oakwood Court in June 2010. the LVT determined that the premium to be paid for the new lease was £492,083, This case was in relation to 1 flat. The number of years remaining on the existing lease(s) was 37.79 years.