Bideford leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Bideford tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Bideford you really ought to check if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under eighty years, the cost of any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancers that we work with procure Bideford lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Reuben owned a conversion flat in Bideford on the market with a lease of a few days over 61 years remaining. Reuben on an informal basis approached his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent to start with set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Reuben to exercise his statutory right. Reuben procured expert advice and secured satisfactory resolution informally and sell the property.
In 2010 we were approached by Mrs Y Martinez who, having acquired a basement apartment in Bideford in February 2010. The question was if we could shed any light on how much (approximately) price would be for a ninety year extension to my lease. Similar premises in Bideford with a long lease were in the region of £280,000. The mid-range amount of ground rent was £45 collected quarterly. The lease ended in 2095. Having 69 years left we approximated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 plus legals.
Mr and Mrs. R Fournier was assigned a lease of a ground floor flat in Bideford in April 1999. We are asked if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Similar flats in Bideford with 100 year plus lease were worth £216,000. The mid-range ground rent payable was £60 invoiced every twelve months. The lease expired on 6 September 2084. Considering the 58 years outstanding we approximated the premium to the freeholder for the lease extension to be between £28,500 and £33,000 not including expenses.