Bookham residential property held on a long lease is a depreciating asset as the leaseholder only owns the property for a set term.
Leasehold premises in Bookham with in excess of one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges merit it.
| 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; |
| 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. |
| 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. |
The lawyers that we work with procure Bookham 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.
Harry was the the leasehold proprietor of a studio flat in Bookham being sold with a lease of a few days over 61 years left. Harry informally contacted his landlord being a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £200 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Harry to exercise his statutory right. Harry obtained expert legal guidance and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
Last Summer we were e-mailed by Mr Andrew Ramírez , who took over the lease of a one bedroom apartment in Bookham in September 2007. We are asked if we could shed any light on how much (approximately) price would likely be for a 90 year lease extension. Similar flats in Bookham with 100 year plus lease were valued about £191,400. The mid-range amount of ground rent was £55 billed per annum. The lease lapsed in 2079. Considering the 54 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £34,200 and £39,600 plus legals.
Last Christmas we were phoned by Dr L Davis , who bought a purpose-built flat in Bookham in January 2002. We are asked if we could approximate the premium could be for a ninety year lease extension. Similar homes in Bookham with a long lease were valued about £295,000. The average amount of ground rent was £45 collected every twelve months. The lease concluded in 2099. Considering the 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.