Bedlington leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Bedlington tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Bedlington you should see if your lease has between seventy and ninety years remaining. There are good reasons why a Bedlington leaseholder with a lease having around eighty years remaining should take steps to ensure that a lease extension is actioned without delay
Leasehold properties in Bedlington with in excess of one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
The conveyancers that we work with undertake Bedlington 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 conveyancing solicitor we work with provide it.
Following protracted negotiations with the landlord of her first floor apartment in Bedlington, Victoria initiated the lease extension process as the 80 year mark was fast nearing. The transaction was finalised in January 2013. The freeholder’s costs were kept to an absolute minimum.
Mr and Mrs. M Lambert owned a recently refurbished apartment in Bedlington in August 2007. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Comparative residencies in Bedlington with 100 year plus lease were valued around £275,000. The average amount of ground rent was £55 collected monthly. The lease lapsed on 17 March 2102. Considering the 76 years unexpired we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of expenses.
Mr and Mrs. A Lefebvre completed a garden flat in Bedlington in February 1996. The question was if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year lease extension. Identical properties in Bedlington with an extended lease were worth £176,200. The average ground rent payable was £65 invoiced per annum. The lease came to a finish in 2082. Having 56 years left we calculated the premium to the landlord to extend the lease to be between £29,500 and £34,000 not including costs.