If you are facing a significant premium because your lease in Bideford has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Why you should commence your Bideford lease extension today:
A Bideford leasehold property depreciates with the years remaining on the lease.
The only way is down when it comes to Bideford lease terms.
Bideford properties that have a remaining term shorter than eighty years will drop in value at a rapid rate,
and the cost of extending your lease will increase.
Bideford property with a lease extension is almost the same value as a freehold
It is generally considered that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years remaining, the property will be equivalent in value to a freehold for decades to come.
Mortgage lenders may not lend with a short lease
Lenders are really restricting their approach as regards to homes in Bideford with short leases. For instance you may find that their lending criteria are stricter and that they adjust interest rates depending on how many years are left on the lease. Some may even refrain from lending completely, so if you needed to sell, your remaining options would be to find a cash purchaser, or hope for the best at auction thus narrowing the number of potential buyers.
| Lender |
Requirement
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|---|
| Barnsley Building Society |
60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term.
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| Birmingham Midshires |
Minimum 70 years from the date of the mortgage.
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| Halifax |
Minimum 70 years from the date of the mortgage.
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| Leeds Building Society |
85 years remaining from the start of the mortgage.
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| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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Get in touch with one of our Bideford lease extension solicitors or enfranchisement solicitors
Using our service will provide you increased control over the value of your Bideford leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell.
The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Bideford Lease Extension Case Summaries:
Alice, Bideford, Devon,
In the wake of eight months of lengthy discussions with the freeholder of her ground floor flat in Bideford, Alice initiated the lease extension process as the eighty year mark was fast advancing. The legal work completed in March 2006. The freeholder’s charges were negotiated to about four hundred GBP.
Bideford case:
In 2012 we were phoned by Mrs Grace Thompson who, having moved into a garden apartment in Bideford in October 2005. The dilemma was if we could shed any light on how much (approximately) price could be to prolong the lease by 90 years. Comparative flats in Bideford with a long lease were worth £181,600. The mid-range amount of ground rent was £55 billed per annum. The lease termination date was in 2078. Having 52 years unexpired we estimated the premium to the freeholder to extend the lease to be between £30,400 and £35,200 exclusive of expenses.
Bideford case:
In 2011 we were phoned by Mr and Mrs. F Collins who, having completed a first floor flat in Bideford in July 2003. We are asked if we could estimate the premium could be for a ninety year lease extension. Comparative premises in Bideford with an extended lease were worth £285,000. The average amount of ground rent was £45 billed per annum. The lease termination date was in 2098. Taking into account 72 years left we estimated the premium to the landlord to extend the lease to be between £12,400 and £14,200 not including expenses.