For those whose Bedminster flat is held on a long lease, our message is clear – if you ignore the situation, your property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to procure a lease extension.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Yorkshire 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. |
Irrespective of whether you are a tenant or a freeholder in Bedminster,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Bedminster valuers.
16 months ago Arthur, came dangerously near to the eighty-year threshold with the lease on his one bedroom apartment in Bedminster. In buying his flat two decades ago, the unexpired term was of little significance. Thankfully, it dawned on him that he needed to take steps soon on Extending the lease. Arthur was able to extend his lease just under the wire last June. Arthur and the landlord eventually agreed on sum of £6,000 . If the lease had dipped below 80 years, the premium would have become more costly by at least £875.
Dr Stanley Sharif moved into a newly refurbished apartment in Bedminster in March 2005. The dilemma was if we could shed any light on how much (roughly) premium would be to prolong the lease by an additional years. Comparable homes in Bedminster with a long lease were worth £171,800. The average amount of ground rent was £55 collected quarterly. The lease lapsed in 2075. Having 50 years as a residual term we estimated the premium to the landlord for the lease extension to be between £33,300 and £38,400 not including expenses.
Mrs Chelsea Thompson purchased a purpose-built apartment in Bedminster in June 2008. We are asked if we could approximate the price would be to extend the lease by 90 years. Comparative premises in Bedminster with 100 year plus lease were worth £280,000. The average amount of ground rent was £45 collected every twelve months. The lease ended on 23 September 2095. Given that there were 70 years remaining we calculated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 exclusive of professional charges.