Byfleet leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Byfleet tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Byfleet you really ought to check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold residencies in Byfleet with more than one hundred years remaining 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 premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a freeholder in Byfleet,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Byfleet valuers.
Ibrahim was the the leasehold proprietor of a conversion flat in Byfleet on the market with a lease of fraction over sixty years unexpired. Ibrahim informally spoke with his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent initially set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Ibrahim to invoke his statutory right. Ibrahim obtained expert advice and was able to make an informed decision and handle with the matter and readily saleable.
In 2009 we were called by Mrs Emily Díaz who, having moved into a one bedroom flat in Byfleet in September 2000. We are asked if we could shed any light on how much (roughly) premium would likely be for a ninety year extension to my lease. Similar homes in Byfleet with an extended lease were worth £215,600. The mid-range amount of ground rent was £45 collected annually. The lease expired on 25 September 2087. Having 62 years outstanding we estimated the premium to the freeholder for the lease extension to be within £18,100 and £20,800 not including expenses.
In 2009 we were e-mailed by Mr I Mercier who, having purchased a ground floor flat in Byfleet in March 1997. The dilemma was if we could estimate the price could be for a 90 year extension to my lease. Comparative residencies in Byfleet with a long lease were in the region of £265,000. The mid-range ground rent payable was £50 invoiced yearly. The lease elapsed on 19 August 2098. Given that there were 73 years outstanding we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 plus fees.