Bedale leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Bedale residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Bedale you should investigate if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold residencies in Bedale with more than one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and estate 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 should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Bedale can be a difficult process. We recommend you obtain guidance from a conveyancer and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Bedale lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Dexter was the the leasehold proprietor of a conversion apartment in Bedale on the market with a lease of fraction over 59 years unexpired. Dexter on an informal basis approached his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Dexter to invoke his statutory right. Dexter obtained expert advice and was able to make a more informed decision and handle with the matter and sell the property.
In 2010 we were contacted by Dr Felix Torres who, having acquired a purpose-built flat in Bedale in April 1995. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year lease extension. Comparable premises in Bedale with a long lease were in the region of £233,200. The average ground rent payable was £60 invoiced annually. The lease ran out in 2086. Having 61 years as a residual term we approximated the premium to the landlord for the lease extension to be between £22,800 and £26,400 plus legals.
Last Winter we were called by Mr Nathaniel David , who purchased a one bedroom flat in Bedale in July 1995. We are asked if we could shed any light on how much (roughly) premium would be to extend the lease by 90 years. Identical premises in Bedale with a long lease were worth £166,800. The mid-range amount of ground rent was £50 invoiced annually. The lease elapsed on 11 May 2075. Having 50 years outstanding we estimated the premium to the landlord to extend the lease to be within £32,300 and £37,400 plus professional charges.