The market value of a leasehold property in Bispham is impacted by how long the lease has left to run. If it is near to or less than eighty years you should foresee difficulties on re-sale, so it is advisable to arrange for the lease to be extended before purchasing. Ideally one should start the lease extension process when a lease still has 82 years unexpired so that a lease extension can be finalised ahead of the eighty year threshold. Statute entitles Bispham qualifying lessees to an additional term of ninety years over and above the remaining term, at a peppercorn rent (no ground rent). The reason of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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. |
Regardless of whether you are a tenant or a landlord in Bispham,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Bispham valuers.
During the course of the last few months Jackson, came precariously near to the 80-year threshold with the lease on his one bedroom flat in Bispham. In buying his home two decades ago, the unexpired term was of minimal concern. Fortunately, he realised he needed to take action soon on Extending the lease. Jackson arranged for a lease extension just ahead of time last May. Jackson and the landlord ultimately agreed on an amount of £5,500 . If he not met the deadline, the sum would have increased by a minimum £975.
In 2013 we were e-mailed by Dr L Stewart who, having owned a one bedroom apartment in Bispham in May 2001. The dilemma was if we could shed any light on how much (approximately) price would be for a ninety year lease extension. Comparable properties in Bispham with 100 year plus lease were valued around £285,000. The average ground rent payable was £55 invoiced per annum. The lease finished in 2105. Given that there were 79 years as a residual term we estimated the premium to the landlord for the lease extension to be between £13,300 and £15,400 exclusive of expenses.
Last Autumn we were phoned by Mr and Mrs. T Pérez , who completed a basement flat in Bispham in April 2005. We are asked if we could estimate the price would be for a 90 year extension to my lease. Similar homes in Bispham with an extended lease were worth £193,400. The mid-range ground rent payable was £65 collected monthly. The lease elapsed on 7 August 2085. Considering the 59 years left we approximated the compensation to the freeholder to extend the lease to be within £21,900 and £25,200 not including legals.