Bickley leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Bickley residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Bickley you really ought to see if your lease has between 70 and 90 years remaining. There are compelling reasons why a Bickley flat owner with a lease having around 80 years remaining should take action to ensure that a lease extension is effected without delay
Leasehold premises in Bickley with over one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Coventry Building Society | 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. |
| 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. |
| 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. |
Retaining our service gives you increased control over the value of your Bickley leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Theo, came seriously close to the eighty-year mark with the lease on his purpose- built apartment in Bickley. Having bought his property two decades ago, the lease term was of no relevance. Thankfully, he realised he would imminently be paying an escalated premium for a lease extension. Theo extended the lease at the eleventh hour last April. Theo and the freeholder subsequently agreed on an amount of £5,500 . If the lease had slipped to less than eighty years, the figure would have gone up by at least £1,075.
In 2011 we were called by Mr and Mrs. H Morgan who, having bought a studio apartment in Bickley in April 1996. The dilemma was if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Similar premises in Bickley with an extended lease were in the region of £168,800. The average ground rent payable was £60 billed every twelve months. The lease expired on 15 September 2081. Considering the 55 years left we estimated the premium to the landlord to extend the lease to be between £31,400 and £36,200 exclusive of legals.
An example of a Lease Extension case for a Bickley residence is 1 Southlands Court Southlands Road in September 2013. The Leasehold Valuation Tribunal determined that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 was £30,541 This case related to 1 flat. The unexpired residue of the current lease was 50.57 years.