For anyone whose Bedford property is held on a long lease, the message is clear – if no remedial action is taken, your property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more it will cost to extend the lease.
It is generally accepted that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| 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 |
The lawyers that we work with procure Bedford 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.
Off the back of protracted correspondence with the landlord of her basement flat in Bedford, Sophie commenced the lease extension process just as her lease was coming close to the crucial 80-year threshold. The legal work was finalised in January 2011. The freeholder’s costs were negotiated to a tad over 450 GBP.
Last May we were contacted by Ms I Bertrand , who acquired a one bedroom apartment in Bedford in June 2000. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year lease extension. Identical residencies in Bedford with an extended lease were valued about £208,200. The mid-range ground rent payable was £65 invoiced per annum. The lease lapsed in 2087. Given that there were 61 years left we approximated the compensation to the landlord to extend the lease to be between £20,000 and £23,000 not including expenses.
Last Spring we were called by Mr and Mrs. S Johnson , who purchased a one bedroom apartment in Bedford in April 2010. The question was if we could approximate the compensation to the landlord could be to extend the lease by a further 90 years. Similar properties in Bedford with an extended lease were valued around £260,000. The average amount of ground rent was £50 invoiced monthly. The lease expiry date was in 2098. Given that there were 72 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus fees.