There is no doubt about it a leasehold property in Bowthorpe is a wasting asset as a result of the diminishing lease term. If the lease has, beyond 99 years remaining then this decrease may be negligible however there will become a point in time when a lease has under than 80 years left as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary reason why you should consider extending without delay. Most flat owners in Bowthorpe will qualify for this right; however a lawyer can advise if you are eligible for a lease extension. In limited situations you may not qualify, the most common reason being that you have owned the property for less than two years.
It is generally considered that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the premises will be equivalent in value to 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with handle Bowthorpe 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 lawyer we work with provide it.
Off the back of unsuccessful negotiations with the landlord of her first floor apartment in Bowthorpe, Natalie commenced the lease extension process just as her lease was coming close to the critical eighty-year mark. The lease extension was concluded in April 2005. The landlord’s costs were kept to an absolute minimum.
Ms Imogen Brown bought a ground floor apartment in Bowthorpe in May 2005. We are asked if we could estimate the premium would likely be for a 90 year lease extension. Identical flats in Bowthorpe with an extended lease were valued about £166,800. The average ground rent payable was £55 billed quarterly. The lease elapsed on 4 November 2076. Having 50 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £32,300 and £37,400 plus expenses.
In 2013 we were called by Mr William Norbert who, having acquired a one bedroom apartment in Bowthorpe in July 2001. The dilemma was if we could approximate the compensation to the landlord would be to extend the lease by 90 years. Comparative homes in Bowthorpe with 100 year plus lease were worth £280,000. The average ground rent payable was £45 billed monthly. The lease finished on 24 October 2096. Considering the 70 years left we estimated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of expenses.