Bulwell leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Bulwell tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Bulwell you should check if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is generally accepted that a residential leasehold with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
Lease extensions in Bulwell can be a difficult process. We recommend you procure guidance from a conveyancing solicitor and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Bulwell lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In recent months Alexander, started to get near to the 80-year threshold with the lease on his purpose- built flat in Bulwell. In buying his property twenty years ago, the length of the lease was of little bearing. by good luck, he noticed he would imminently be paying an inflated amount for Extending the lease. Alexander extended the lease at the eleventh hour in May. Alexander and the freeholder via the management company subsequently agreed on an amount of £5,000 . If he had missed the deadline, the premium would have gone up by at least £1,000.
Last Summer we were called by Mr and Mrs. N François , who was assigned a lease of a basement apartment in Bulwell in November 2008. The question was if we could approximate the compensation to the landlord would likely be to extend the lease by ninety years. Similar flats in Bulwell with an extended lease were worth £181,600. The average ground rent payable was £55 collected every twelve months. The lease ended on 23 May 2077. Given that there were 52 years left we approximated the premium to the landlord for the lease extension to be within £30,400 and £35,200 exclusive of fees.
Mr Thomas Patel acquired a purpose-built flat in Bulwell in May 1995. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year lease extension. Comparative premises in Bulwell with 100 year plus lease were worth £290,000. The mid-range ground rent payable was £45 collected yearly. The lease elapsed in 2097. Considering the 72 years outstanding we calculated the premium to the freeholder for the lease extension to be between £11,400 and £13,200 not including fees.