Bulwell 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 your lease becomes more expensive. It is the case that most Bulwell tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Bulwell you must investigate if your lease has between seventy and ninety years remaining. There are good reasons why a Bulwell leaseholder with a lease having around 80 years unexpired should take steps to make sure that a lease extension is effected without delay
It is generally accepted that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the premises will be worth the same as 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. |
| 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; |
| 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. |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Bulwell,the lease extension lawyers 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 Bulwell valuers.
In the wake of eight months of lengthy correspondence with the landlord of her studio flat in Bulwell, Danielle commenced the lease extension process as the eighty year threshold was swiftly advancing. The transaction completed in September 2011. The freeholder’s costs were kept to an absolute minimum.
Last month we were contacted by Mr and Mrs. R Vincent , who owned a first floor apartment in Bulwell in October 2009. The dilemma was if we could approximate the premium would be for a 90 year lease extension. Similar residencies in Bulwell with 100 year plus lease were valued about £275,000. The mid-range ground rent payable was £65 invoiced monthly. The lease terminated in 2093. Given that there were 68 years left we approximated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 exclusive of costs.
Mr P Bell purchased a first floor apartment in Bulwell in June 1998. The question was if we could approximate the price would be to extend the lease by an additional years. Identical properties in Bulwell with a long lease were worth £208,600. The mid-range ground rent payable was £60 invoiced yearly. The lease ended in 2082. Taking into account 57 years left we calculated the compensation to the freeholder to extend the lease to be between £30,400 and £35,200 exclusive of costs.