Bow Street leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Most owners of residential leasehold property in Bow Street enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Bow Street you must check if your lease has between seventy and 90 years left. There are compelling reasons why a Bow Street flat owner with a lease having around 80 years unexpired should take steps to ensure that a lease extension is put in place without delay
Leasehold residencies in Bow Street with in excess of one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Bow Street,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 experience and the close ties they enjoy with Bow Street valuers.
In 2014 Zachary, came very near to the 80-year threshold with the lease on his garden apartment in Bow Street. Having bought his flat two decades ago, the lease term was of minimal interest. Luckily, he became aware that he needed to take steps soon on a lease extension. Zachary was able to extend his lease just under the wire in January. Zachary and the landlord who owned the flat above eventually settled on the final figure of £5,500 . If he failed to meet the deadline, the amount would have increased by at least £950.
Mr and Mrs. I Adams owned a recently refurbished flat in Bow Street in January 2012. The dilemma was if we could shed any light on how much (approximately) price could be to prolong the lease by an additional years. Identical residencies in Bow Street with 100 year plus lease were worth £166,400. The average ground rent payable was £60 billed annually. The lease ended on 14 April 2080. Taking into account 54 years remaining we calculated the premium to the landlord to extend the lease to be between £32,300 and £37,400 not including costs.
In 2014 we were approached by Dr Adam Lewis who, having took over the lease of a purpose-built apartment in Bow Street in June 2009. We are asked if we could estimate the premium could be to prolong the lease by an additional years. Identical flats in Bow Street with 100 year plus lease were valued about £227,800. The average amount of ground rent was £45 collected monthly. The lease ran out in 2091. Given that there were 65 years left we approximated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 not including costs.