Bispham 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 your lease becomes more expensive. It is the case that most Bispham tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Bispham you really ought to investigate if your lease has between seventy and ninety years left. There are good reasons why a Bispham leaseholder with a lease having around eighty years left should take action to ensure that a lease extension is effected without delay
Leasehold residencies in Bispham with over 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Bispham,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Bispham valuers.
Half a year ago Noah, came perilously close to the eighty-year threshold with the lease on his basement apartment in Bispham. In buying his flat 18 years previously, the length of the lease was of minimal concern. Luckily, he realised he would soon be paying an inflated amount for a lease extension. Noah was able to extend his lease just ahead of time in June. Noah and the landlord subsequently settled on an amount of £5,500 . If the lease had gone below eighty years, the amount would have increased by at least £1,050.
In 2010 we were contacted by Mr John Campbell who, having completed a studio flat in Bispham in September 2006. The dilemma was if we could estimate the premium would likely be to prolong the lease by ninety years. Identical properties in Bispham with a long lease were valued about £260,000. The average amount of ground rent was £50 collected quarterly. The lease ended on 4 October 2097. Given that there were 72 years outstanding we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 not including expenses.
In 2013 we were phoned by Mr B Lefèvre who, having completed a recently refurbished flat in Bispham in January 2001. We are asked if we could shed any light on how much (roughly) premium would be for a 90 year extension to my lease. Comparable premises in Bispham with 100 year plus lease were worth £256,600. The mid-range ground rent payable was £60 billed annually. The lease end date was on 1 October 2077. Taking into account 52 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £39,000 and £45,000 plus fees.