The market value of Bermondsey 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 remaining term is below than 80 years
Leasehold residencies in Bermondsey with in excess of 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges warrant it.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
Irrespective of whether you are a tenant or a freeholder in Bermondsey,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Bermondsey valuers.
Daniel owned a 2 bedroom apartment in Bermondsey being sold with a lease of fraction over 72 years outstanding. Daniel on an informal basis contacted his landlord a well known London-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 £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Daniel to invoke his statutory right. Daniel procured expert legal guidance and secured satisfactory resolution without going to tribunal and sell the property.
In 2009 we were e-mailed by Dr Jayden Bernard who, having took over the lease of a garden apartment in Bermondsey in October 2004. We are asked if we could approximate the premium could be to prolong the lease by 90 years. Comparable homes in Bermondsey with an extended lease were worth £174,200. The mid-range ground rent payable was £55 billed yearly. The lease finished on 1 August 2077. Taking into account 51 years remaining we approximated the premium to the freeholder for the lease extension to be between £31,400 and £36,200 not including fees.
An example of a Freehold Enfranchisement case for a Bermondsey residence 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 residue of the current lease was 107 years.