Owning a flat usually means owning a lease of the property, which has a set term of years. The lease will usually be granted for a set period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Bude. Inevitably, the period of lease remaining reduces as time goes by. This is often overlooked and only becomes a problem when the property needs to be sold or refinanced. The fewer the years remaining the lower the value of the property and the more expensive it will be to extend the lease. Eligible leaseholders in Bude have the right to extend the lease for a further 90 years in accordance with statute. You should give careful consideration before delaying your Bude lease extension. Putting off that expense now only increases the price you will ultimately have to pay for a lease extension
Leasehold residencies in Bude with over 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
Irrespective of whether you are a tenant or a landlord in Bude,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Bude valuers.
Last Spring Jonathan, started to get close to the 80-year threshold with the lease on his purpose- built flat in Bude. In buying his flat two decades ago, the unexpired term was of no importance. Fortunately, he became aware that he would soon be paying an escalated premium for a lease extension. Jonathan arranged for a lease extension just under the wire last July. Jonathan and the freeholder in the end agreed on an amount of £6,000 . If the lease had descended below 80 years, the sum would have increased by at least £925.
Last Summer we were phoned by Mr and Mrs. S Mitchell , who bought a studio flat in Bude in February 2009. The dilemma was if we could estimate the price could be for a ninety year lease extension. Similar properties in Bude with 100 year plus lease were in the region of £275,000. The mid-range amount of ground rent was £65 billed per annum. The lease terminated on 13 November 2094. Given that there were 68 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 plus expenses.
In 2012 we were approached by Mrs N Thompson who, having was assigned a lease of a recently refurbished apartment in Bude in August 2009. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by an additional years. Comparative homes in Bude with a long lease were worth £208,600. The average ground rent payable was £60 collected monthly. The lease expired in 2083. Considering the 57 years left we approximated the compensation to the landlord for the lease extension to be between £30,400 and £35,200 not including fees.