The market value of a leasehold property in Bembridge is impacted by how long the lease has remaining. If it is close to or less 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 process of extending the lease is when a lease still has 82 years remaining so that a lease extension can be addressed ahead of the eighty year mark. Current legislation enables Bembridge qualifying lessees to an additional term of ninety years over and above the unexpired term, at a peppercorn rent (no ground rent). The reason of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Halifax | Minimum 70 years from the date 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 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.
Subsequent to unsuccessful discussions with the freeholder of her ground floor apartment in Bembridge, Shannon commenced the lease extension process as the eighty year mark was fast advancing. The legal work was concluded in January 2013. The freeholder’s fees were negotiated to less than 550 GBP.
Last August we were contacted by Dr Aiden Cooper , who acquired a first floor flat in Bembridge in June 1996. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Comparable premises in Bembridge with an extended lease were in the region of £200,000. The average ground rent payable was £50 collected annually. The lease expiry date was on 4 April 2102. Given that there were 77 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of legals.
Dr Jodie Robinson took over the lease of a purpose-built apartment in Bembridge in August 1996. The question was if we could approximate the price could be for a 90 year lease extension. Similar residencies in Bembridge with a long lease were in the region of £265,200. The mid-range amount of ground rent was £65 invoiced monthly. The lease ran out in 2091. Considering the 66 years unexpired we calculated the compensation to the landlord to extend the lease to be between £15,200 and £17,600 plus professional charges.