Top reasons for Bardsley lease extension
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Main reasons to commence your Bardsley lease extension today:
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<h4> A <a href="http://www.lendermonitor.com/conveyancing/loc/bardsley">Bardsley</a> leasehold property depreciates with the years remaining on the lease.
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<p> Chances are that if you own a flat in Bardsley you actually own a long leasehold interest over your property
<h4>Bardsley property with a lease extension has roughly the same value as a freehold</h4>
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Leasehold residencies in Bardsley with more than one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and estate charges justify it. <h4>Lending institutions will not loan monies with a short lease</h4>
Most banks have narrowed their lending criteria in recent years and borrowers are finding it increasingly difficult to raise finance or re-mortgage against property with shorter lease terms, particularly under 75 years as they are deemed to be insufficient security.
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<tr><th>Lender</th>
<th> Requirement
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<td>Birmingham Midshires</td>
<td> Minimum 70 years from the date of the mortgage.
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<td>Leeds Building Society</td>
<td> 85 years remaining from the start of the mortgage.
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<td>Nationwide Building Society</td>
<td> - Our minimum unexpired lease term is 55 years, except where lending is over 85% of the purchase price/valuation on a second hand flat, in which case our minimum unexpired term is 90 years. <br />- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).<br /><br />Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:<br /><br />Second hand property:<br />- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years <br />- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported<br />- For equity share applications - advise us if the actual lease term is different than reported on the offer<br />- Where lending is over 85% of the purchase price/valuation on a second hand flat and the unexpired lease term on the offer is 90 years or more - only advise us if the actual lease term is less than 90 years. <br /><br />New build property:<br />- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)<br />- For equity share applications - always advise us if the actual lease term is different than reported on the offer<br /><br />Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.<br /><br />SECOND HAND PROPERTIES<br /><br />Unacceptable - advise Issuing Office (Will be declined):<br />- Unexpired lease term less than 55 years<br />- Unexpired lease term less than 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat<br />- Less than 30 years remaining at the end of the mortgage term<br />- Ground Rent greater than 0.5% of the property value<br />- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more<br />- Ground Rent is compounded RPI<br />- Ground Rent review period is less than or equal to 5 years<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Unexpired lease term is 55 to 85 years<br />- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value<br />- Ground Rent escalation is linked to any indices greater than RPI<br />- Ground Rent escalation is linked to the value of the building*<br />- Ground Rent review period is greater than 5 and less than 10 years<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial, etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)<br />- Anything that appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office):<br />- Unexpired lease term greater than 85 years (Minimum 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat)<br />- Ground Rent less than or equal to 0.1% of the property value<br />- Ground Rent review period greater than or equal to 10 years<br />- Ground Rent escalation less than or equal to RPI<br /><br />NEW BUILD PROPERTIES (includes office conversions)<br /><br />Unacceptable - advise Issuing Office (Will be declined)<br />- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house (does not apply to Shared Ownership)<br />- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis<br />- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)<br />- Anything else appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office):<br />- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house<br />- A lease subject to a peppercorn Ground Rent (Annual Rent) charges<br /><br />For the avoidance of doubt, any New Build properties completed but not sold pre-30 June 2022 will only be acceptable if the Lease conforms to the above guidance. <br /><br />* Where the Ground Rent escalation is linked to the value of the building, please provide the following:<br />- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?<br />- The current valuation and Ground Rent for each unit<br />- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?<br />- What is the right of appeal? And is this a documented process within the lease?<br />- Who bears the cost of the valuation (and appeal) process?<br />- Confirmation the review period is not less than twenty years.<br /><br />Lease Extensions<br /><br />We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to Issuing Office. <br /><br />Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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<td>Santander</td>
<td> You must report the unexpired lease term to us and await our instructions if: <br />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<br />2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or<br />3. no valuation report is provided<br />However, we will not accept a lease where on expiry of the mortgage:<br />(i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or<br />(ii) less than 30 years remain and the loan is repaid on a capital and interest basis<br /><br />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.
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<td>TSB</td>
<td> Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.
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<h4> Get in touch with one of our Bardsley lease extension solicitors or enfranchisement solicitors
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The lawyers that we work with procure Bardsley lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
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Bardsley Lease Extension Case Summaries:
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<h5> Isobel, Bardsley, Greater Manchester,</h5>
<p> After protracted correspondence with the freeholder of her two bedroom apartment in Bardsley, Isobel started the lease extension process just as her lease was coming close to the all-important eighty-year mark. The legal work completed in February 2009. The freeholder’s charges were kept to an absolute minimum.
<h5>Bardsley case:</h5>
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Last Christmas we were contacted by Mr N Lambert , who
acquired a one bedroom apartment in Bardsley in May 2009. We are asked if we could approximate the price would likely be to extend the lease by an additional years. Comparative premises in Bardsley with a long lease were worth £265,200. The average ground rent payable was £65 invoiced quarterly. The lease finished on 4 July 2092. Considering the 66 years left we approximated the premium to the freeholder to extend the lease to be between £15,200 and £17,600 exclusive of fees.
<h5>Bardsley case:</h5>
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In 2010 we were phoned by Mr and Mrs. G Jackson who, having took over the lease of a purpose-built flat in Bardsley in April 2007. The dilemma was if we could approximate the price would likely be to prolong the lease by an additional years. Comparable homes in Bardsley with 100 year plus lease were in the region of £198,800. The average ground rent payable was £55 billed every twelve months. The lease elapsed in 2081. Given that there were 55 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £33,300 and £38,400 exclusive of legals.
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