The market value of Bembridge leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can increase significantly once the unexpired lease term is below than eighty years
It is generally accepted that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the property 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. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 undertake 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 lawyer we work with provide it.
Off the back of unsuccessful discussions with the freeholder of her two bedroom apartment in Bembridge, Alexandra started the lease extension process as the eighty year threshold was quickly nearing. The lease extension was concluded in January 2015. The landlord’s fees were restricted to slightly above 650 pounds.
Dr Isabella Rodríguez moved into a one bedroom flat in Bembridge in July 1999. The question was if we could estimate the premium would likely be to extend the lease by an additional years. Similar residencies in Bembridge with a long lease were in the region of £174,200. The average ground rent payable was £55 billed quarterly. The lease ran out on 6 April 2077. Considering the 51 years remaining we calculated the compensation to the landlord for the lease extension to be within £31,400 and £36,200 plus fees.
Last Summer we were contacted by Mr and Mrs. V Murphy , who completed a ground floor apartment in Bembridge in June 2008. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by ninety years. Similar flats in Bembridge with a long lease were in the region of £285,000. The mid-range amount of ground rent was £45 collected per annum. The lease termination date was on 17 October 2097. Considering the 71 years unexpired we calculated the premium to the landlord to extend the lease to be within £12,400 and £14,200 not including expenses.