It’s a harsh certainty that a Bow Street residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Bow Street property prices.Where your lease has approximately ninety years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips under eighty years - otherwise a higher amount will be due. The majority of flat owners in Bow Street will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the process.
It is generally accepted that a residential leasehold with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Lease extensions in Bow Street can be a difficult process. We recommend you procure professional help from a lawyer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Bow Street lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Jayden was the the leasehold proprietor of a 2 bedroom flat in Bow Street being sold with a lease of fraction over 61 years left. Jayden on an informal basis approached his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Jayden to invoke his statutory right. Jayden procured expert advice and secured an acceptable resolution without resorting to tribunal and ending up with a market value flat.
Last Autumn we were contacted by Dr Alexandra André , who took over the lease of a studio apartment in Bow Street in March 2010. We are asked if we could estimate the premium would be for a ninety year lease extension. Comparative properties in Bow Street with 100 year plus lease were valued about £280,000. The average ground rent payable was £55 collected monthly. The lease came to a finish in 2103. Considering the 78 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 plus legals.
Mrs Hannah Peterson bought a garden apartment in Bow Street in August 2004. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by an additional years. Comparative flats in Bow Street with 100 year plus lease were worth £186,000. The average ground rent payable was £65 collected every twelve months. The lease came to a finish on 28 January 2083. Taking into account 58 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £24,700 and £28,600 exclusive of fees.