It’s a harsh truth that a Bellingham residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Bellingham property market.Where your lease has approximately ninety years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips lower than 80 years - otherwise a higher amount will be payable. Most flat owners in Bellingham will be able to extend under the legislation; however a conveyancer should be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to 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 Bellingham with in excess of 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 home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle Bellingham 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 lawyer we work with provide it.
Two years ago Logan, started to get close to the 80-year mark with the lease on his ground floor apartment in Bellingham. In buying his home two decades ago, the lease term was of no importance. As luck would have it, he became aware that he needed to take steps soon on a lease extension. Logan was able to extend his lease just ahead of time in September. Logan and the freeholder via the managing agents in the end agreed on the final figure of £6,000 . If the lease had dipped to less than eighty years, the amount would have increased by at least £1,125.
Last Autumn we were contacted by Mr Logan Girard , who purchased a newly refurbished apartment in Bellingham in November 2005. The dilemma was if we could estimate the premium could be for a ninety year extension to my lease. Similar properties in Bellingham with an extended lease were valued about £193,400. The average ground rent payable was £65 billed monthly. The lease ran out on 1 September 2085. Given that there were 59 years left we approximated the premium to the landlord for the lease extension to be between £21,900 and £25,200 exclusive of professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Bellingham premises is 75 Woolstone Road in February 2012. the decision of the Tribunal was that the appropriate amount to be paid to purchase the freehold was the sum of £17,711 . This case was in relation to 2 flats. The unexpired term was 68.28 and 158.