The rule of thumb is, all other things holding equal, the shorter the lease the more costly the premium. Qualifying leaseholders in Bembridge can extend the lease for a further 90 years in accordance with the 1993 Leasehold Reform Act. Do give careful consideration before delaying your Bembridge lease extension. Postponing that expense now simply escalates the premium you will ultimately be required to pay for a lease extension.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 conveyancing solicitors that we work with procure Bembridge 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.
Sam owned a high value flat in Bembridge being sold with a lease of a few days over 59 years remaining. Sam on an informal basis approached his landlord a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £100 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Sam to invoke his statutory right. Sam obtained expert legal guidance and secured satisfactory deal without going to tribunal and ending up with a market value flat.
In 2014 we were approached by Mr Cameron Martin who, having was assigned a lease of a purpose-built flat in Bembridge in August 2003. The question was if we could estimate the compensation to the landlord would be to prolong the lease by 90 years. Comparable properties in Bembridge with a long lease were valued around £216,000. The average ground rent payable was £60 invoiced every twelve months. The lease ran out in 2084. Considering the 58 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £28,500 and £33,000 plus costs.
Mrs D Green bought a one bedroom apartment in Bembridge in July 2012. The dilemma was if we could approximate the price could be for a ninety year extension to my lease. Similar flats in Bembridge with a long lease were valued around £205,000. The average amount of ground rent was £50 collected monthly. The lease terminated on 22 July 2104. Taking into account 78 years remaining we approximated the premium to the landlord to extend the lease to be within £8,600 and £9,800 not including costs.