The market value of a leasehold property in Bow Street depends on how long the lease has left to run. If it is close to or fewer than 80 years you should foresee difficulties on re-sale, so it is recommended to arrange for the lease to be extended before purchasing. It is ideal to start the process of extending the lease is when a lease still has 82 years unexpired so that a lease extension can be finalised prior to the eighty year threshold. Statute entitles Bow Street qualifying lessees to acquire a lease extension of ninety years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The intention of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold residencies in Bow Street with in excess of one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 |
| 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 enhanced control over the value of your Bow Street leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Mason, came dangerously near to the eighty-year mark with the lease on his basement flat in Bow Street. Having purchased his property two decades ago, the lease term was of little interest. by good luck, it dawned on him that he would imminently be paying an escalated premium for a lease extension. Mason was able to extend his lease at the eleventh hour last March. Mason and the freeholder via the managing agents ultimately agreed on a premium of £6,000 . If the lease had fallen to less than eighty years, the amount would have increased by a minimum £1,075.
Last Christmas we were contacted by Mr O Bailey , who was assigned a lease of a garden flat in Bow Street in October 2008. The question was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Comparative premises in Bow Street with an extended lease were worth £255,000. The mid-range amount of ground rent was £50 collected quarterly. The lease terminated in 2096. Given that there were 71 years outstanding we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 not including professional charges.
Last Winter we were e-mailed by Ms E Garcia , who was assigned a lease of a ground floor flat in Bow Street in March 2000. We are asked if we could estimate the premium would likely be for a ninety year extension to my lease. Similar homes in Bow Street with a long lease were worth £254,200. The average amount of ground rent was £60 invoiced per annum. The lease came to a finish in 2076. Given that there were 51 years left we calculated the compensation to the landlord for the lease extension to be within £43,700 and £50,600 exclusive of fees.