Bermondsey leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Bermondsey residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Bermondsey you must check if your lease has between 70 and 90 years left. There are compelling reasons why a Bermondsey flat owner with a lease having around 80 years left should take steps to ensure that a lease extension is effected without delay
It is generally accepted that a property with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| Lloyds TSB Scotland | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide you better control over the value of your Bermondsey leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Alex owned a high value apartment in Bermondsey being marketed with a lease of fraction over 61 years remaining. Alex on an informal basis contacted his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £100 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Alex to exercise his statutory right. Alex procured expert legal guidance and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
In 2013 we were contacted by Ms F Ali who, having completed a basement apartment in Bermondsey in January 2005. We are asked if we could approximate the price would be to prolong the lease by ninety years. Identical flats in Bermondsey with an extended lease were worth £235,600. The mid-range ground rent payable was £60 collected yearly. The lease expired on 20 May 2088. Considering the 62 years unexpired we calculated the premium to the landlord to extend the lease to be within £21,900 and £25,200 exclusive of expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a Bermondsey property 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 was in relation to 41 flats. The unexpired term as at the valuation date was 107 years.