The market value of a leasehold property in Bedworth is impacted by how many years the lease has left to run. If it is near to or fewer than 80 years you should expect difficulties on re-sale, so it is advisable to arrange for the lease to be extended before buying. It is preferable to start the lease extension process when the lease still has 82 years to run so that all matters can be finalised well before the eighty year mark. Leasehold Reform legislation entitles Bedworth qualifying lessees to an additional term of ninety years on top of the remaining term, at a notional rent (no ground rent). The intention of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 35 years left, the premises will be equivalent in value to a freehold for many years ahead.
| 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 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; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Regardless of whether you are a tenant or a landlord in Bedworth,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Bedworth valuers.
Jacob owned a high value flat in Bedworth being marketed with a lease of a few days over sixty years unexpired. Jacob on an informal basis approached his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Jacob to invoke his statutory right. Jacob obtained expert legal guidance and was able to make a more informed decision and deal with the matter and readily saleable.
Last Christmas we were contacted by Mr and Mrs. J Fournier , who acquired a purpose-built flat in Bedworth in April 2002. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by ninety years. Identical homes in Bedworth with 100 year plus lease were worth £300,000. The average ground rent payable was £50 invoiced yearly. The lease terminated in 2102. Having 76 years outstanding we approximated the premium to the landlord for the lease extension to be between £8,600 and £9,800 not including costs.
In 2013 we were e-mailed by Ms Paige Wright who, having acquired a newly refurbished apartment in Bedworth in August 2002. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by an additional years. Comparative properties in Bedworth with an extended lease were in the region of £257,800. The average amount of ground rent was £65 billed annually. The lease lapsed in 2091. Considering the 65 years unexpired we estimated the premium to the landlord to extend the lease to be within £18,100 and £20,800 plus expenses.