Biddulph leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Biddulph residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Biddulph you should investigate if your lease has between seventy and 90 years remaining. There are good reasons why a Biddulph leaseholder with a lease having around eighty years remaining should take steps to make sure that a lease extension is put in place without delay
Leasehold residencies in Biddulph with in excess of one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and estate 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 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
Using our service will provide you enhanced control over the value of your Biddulph leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Last year Teddy, started to get close to the 80-year mark with the lease on his ground floor apartment in Biddulph. In buying his property two decades ago, the unexpired term was of little interest. As luck would have it, he recognised he would soon be paying way over the odds for a lease extension. Teddy arranged for a lease extension at the eleventh hour last April. Teddy and the landlord who owned the flat above eventually agreed on a premium of £5,500 . If he had missed the deadline, the price would have gone up by at least £1,000.
Last year we were approach by Mrs Kirsty Ricardo , who moved into a recently refurbished apartment in Biddulph in August 2007. The question was if we could estimate the compensation to the landlord could be to prolong the lease by an additional years. Similar premises in Biddulph with 100 year plus lease were worth £193,400. The mid-range amount of ground rent was £65 collected every twelve months. The lease expired in 2084. Taking into account 59 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £21,900 and £25,200 not including costs.
Last month we were e-mailed by Dr J Johnson , who owned a newly refurbished apartment in Biddulph in May 1995. We are asked if we could shed any light on how much (roughly) premium would likely be to extend the lease by 90 years. Comparable premises in Biddulph with a long lease were worth £255,000. The average ground rent payable was £50 collected per annum. The lease came to a finish in 2095. Considering the 70 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £10,500 and £12,000 not including expenses.