Bubwith leases on residential properties are gradually losing 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 Bubwith tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Bubwith you would be well advised to investigate if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold premises in Bubwith with in excess of 100 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 home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The conveyancing solicitors that we work with procure Bubwith 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 conveyancer we work with provide it.
Arthur owned a high value flat in Bubwith on the market with a lease of just over 59 years remaining. Arthur informally contacted his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder 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 £150 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Arthur to exercise his statutory right. Arthur procured expert legal guidance and secured an acceptable resolution without resorting to tribunal and readily saleable.
Ms Lily Leroy took over the lease of a garden flat in Bubwith in September 2004. We are asked if we could estimate the compensation to the landlord would be to extend the lease by ninety years. Similar homes in Bubwith with an extended lease were worth £280,000. The average ground rent payable was £45 billed quarterly. The lease ran out in 2095. Taking into account 70 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 exclusive of expenses.
Mr C Davis took over the lease of a ground floor flat in Bubwith in May 2005. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year extension to my lease. Comparable homes in Bubwith with 100 year plus lease were worth £218,400. The mid-range ground rent payable was £60 billed annually. The lease finished in 2084. Given that there were 59 years unexpired we estimated the compensation to the freeholder for the lease extension to be between £27,600 and £31,800 exclusive of expenses.