For anyone whose Bitterne property is held on a long lease, our message is clear – if you do nothing, the property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to obtain a lease extension.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 30 years left, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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 lawyers that we work with undertake Bitterne 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 lawyer we work with provide it.
Trailing lengthy discussions with the freeholder of her studio flat in Bitterne, Sarah commenced the lease extension process just as the lease was approaching the crucial 80-year deadline. The transaction was finalised in April 2008. The landlord’s costs were negotiated to below 650 GBP.
In 2014 we were called by Dr J Cooper who, having completed a one bedroom apartment in Bitterne in November 2006. We are asked if we could estimate the price would be to extend the lease by a further 90 years. Identical properties in Bitterne with 100 year plus lease were in the region of £173,800. The average amount of ground rent was £65 invoiced quarterly. The lease expired on 7 March 2080. Having 55 years unexpired we approximated the premium to the freeholder to extend the lease to be between £31,400 and £36,200 plus professional charges.
Mr and Mrs. C Bell completed a purpose-built apartment in Bitterne in January 2004. The question was if we could approximate the premium would be to prolong the lease by a further 90 years. Identical properties in Bitterne with a long lease were in the region of £235,200. The mid-range amount of ground rent was £45 billed yearly. The lease elapsed on 20 February 2091. Having 66 years remaining we estimated the premium to the landlord for the lease extension to be within £12,400 and £14,200 exclusive of professional charges.