Bridport leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Bridport tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Bridport you should check if your lease has between seventy and ninety years remaining. There are compelling reasons why a Bridport leaseholder with a lease having around 80 years left should take steps to ensure that a lease extension is actioned without delay
Leasehold premises in Bridport with over 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with procure Bridport 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.
Last October Connor, started to get near to the eighty-year mark with the lease on his basement flat in Bridport. In buying his home 19 years previously, the lease term was of minimal interest. Fortunately, he became aware that he would imminently be paying an escalated premium for Extending the lease. Connor extended the lease just under the wire last August. Connor and the freeholder eventually settled on a premium of £6,000 . If he failed to meet the deadline, the premium would have escalated by at least £975.
Last Winter we were e-mailed by Dr Luca Ramírez , who was assigned a lease of a studio apartment in Bridport in January 2007. The question was if we could estimate the price would likely be for a ninety year lease extension. Comparative homes in Bridport with an extended lease were valued about £250,400. The mid-range amount of ground rent was £65 collected per annum. The lease ended on 8 October 2089. Taking into account 64 years as a residual term we estimated the premium to the landlord for the lease extension to be within £19,000 and £22,000 not including costs.
In 2013 we were e-mailed by Mr and Mrs. T Ricardo who, having bought a first floor flat in Bridport in April 1997. The question was if we could shed any light on how much (roughly) premium would be for a ninety year lease extension. Similar premises in Bridport with 100 year plus lease were valued around £189,000. The mid-range ground rent payable was £55 collected yearly. The lease end date was in 2078. Having 53 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £28,500 and £33,000 exclusive of fees.