Bungay residential property owned on a long lease is a wasting asset as the leaseholder merely owns the property for a set term.
Leasehold residencies in Bungay with over 100 years left on the lease are often referred to as ‘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 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service gives you better control over the value of your Bungay leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Luke, came dangerously near to the 80-year threshold with the lease on his garden apartment in Bungay. In buying his home two decades ago, the unexpired term was of minimal relevance. Fortunately, he became aware that he would soon be paying an escalated premium for a lease extension. Luke arranged for a lease extension just in the nick of time last September. Luke and the landlord who owned the flat above ultimately agreed on an amount of £6,000 . If the lease had gone lower than eighty years, the sum would have gone up by a minimum £1,150.
Last Summer we were e-mailed by Dr P Rodríguez , who acquired a garden flat in Bungay in March 2008. The question was if we could estimate the compensation to the landlord would likely be to extend the lease by an additional years. Comparable residencies in Bungay with 100 year plus lease were in the region of £198,800. The average ground rent payable was £55 collected every twelve months. The lease ran out on 13 July 2080. Having 55 years remaining we approximated the premium to the freeholder to extend the lease to be within £33,300 and £38,400 not including legals.
Mr and Mrs. Y Jones bought a one bedroom apartment in Bungay in September 2009. The dilemma was if we could shed any light on how much (roughly) premium would be to extend the lease by an additional years. Similar premises in Bungay with a long lease were in the region of £295,000. The mid-range amount of ground rent was £45 billed annually. The lease elapsed on 18 August 2100. Taking into account 75 years remaining we estimated the premium to the landlord to extend the lease to be within £8,600 and £9,800 not including professional charges.