There is no doubt about it a leasehold flat or house in Bodmin is a wasting asset as a result of the shortening lease. If the residual term has, in excess of 100 years to run then this decrease may be fractional that being said there will become a point in time when a lease has fewer than 80 years left as part of the premium you will incur is what is known as a marriage value. This could increase sharply the cost. It is the main logic behind why you should consider extending sooner rather than later. Many flat owners in Bodmin will meet the qualifying criteria; however a lawyer can advise whether you are eligible for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
Retaining our service will provide you better control over the value of your Bodmin leasehold, as your property will be more valuable and saleable 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.
Reuben owned a 2 bedroom apartment in Bodmin being sold with a lease of a few days over sixty years unexpired. Reuben on an informal basis contacted his freeholder a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Reuben to invoke his statutory right. Reuben obtained expert legal guidance and was able to make a more informed decision and handle with the matter and sell the flat.
Last March we were phoned by Mrs T Bailey , who took over the lease of a one bedroom flat in Bodmin in March 2000. The question was if we could approximate the price would be for a ninety year lease extension. Comparable homes in Bodmin with a long lease were worth £295,000. The mid-range amount of ground rent was £45 collected every twelve months. The lease terminated on 8 October 2099. Given that there were 74 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 plus costs.
Mr S Sánchez took over the lease of a purpose-built flat in Bodmin in January 2003. We are asked if we could approximate the premium could be for a 90 year lease extension. Comparable residencies in Bodmin with an extended lease were worth £243,000. The mid-range ground rent payable was £65 billed monthly. The lease ended on 6 August 2088. Given that there were 63 years unexpired we estimated the compensation to the freeholder for the lease extension to be between £20,000 and £23,000 plus professional charges.