When it comes to long leasehold property in Bermondsey, you are actually purchasing a right to live in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may think about extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive notably when there are fewer than eighty years remaining. Residents in Bermondsey with a lease drawing near to 81 years left should seriously think of extending it as soon as possible. Once a lease has fewer than eighty years outstanding, under the current legislation the landlord is entitled to calculate and charge a greater premium, based on a technical calculation, known as “marriage value” which is payable.
It is generally accepted that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| 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; |
| Godiva Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| 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 |
Regardless of whether you are a tenant or a freeholder in Bermondsey,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Bermondsey valuers.
Max owned a studio flat in Bermondsey being marketed with a lease of fraction over 72 years unexpired. Max informally contacted his landlord a well known Manchester-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 rise in the rent to £50 yearly. No ground rent would be due on a lease extension were Max to invoke his statutory right. Max obtained expert advice and secured satisfactory resolution without resorting to tribunal and readily saleable.
In 2011 we were contacted by Mr and Mrs. W Martínez who, having owned a one bedroom apartment in Bermondsey in May 2003. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by ninety years. Identical flats in Bermondsey with a long lease were in the region of £290,000. The average amount of ground rent was £45 billed quarterly. The lease finished in 2098. Considering the 73 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 not including professional charges.
An example of a Freehold Enfranchisement case for a Bermondsey flat is 1-41 Royal Tower Lodge 40 Cartwright Street in April 2013. the tribunal adding the agreed value of capitalised ground rents and the reversion the price to be paid for the freehold was £1,187,000 This case related to 41 flats. The unexpired lease term was 107 years.