Bermondsey leases on residential deteriorating in value. Where your lease has in the region of 90 years remaining, you should start thinking about a lease extension. If lease term falls under 80 years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Flat owners in Bermondsey will usually qualify for a lease extension; however a solicitor will check if you qualify. In certain cases you may not be entitled. There are prescribed deadlines and steps to comply with once the process has commenced so it’s prudent to be guided by a conveyancing solicitor during the process.
It is generally accepted that a residential leasehold with more than 100 years unexpired lease term is worth approximately the same 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 decades to come.
| Lender | Requirement |
|---|---|
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle Bermondsey 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 conveyancer we work with provide it.
In the wake of eight months of lengthy negotiations with the landlord of her purpose-built flat in Bermondsey, Charlotte initiated the lease extension process just as the lease was nearing the crucial eighty-year threshold. The transaction was finalised in May 2009. The landlord’s charges were restricted to below 500 GBP.
In 2010 we were called by Mr Oliver Johnson who, having moved into a basement apartment in Bermondsey in January 2001. The question was if we could approximate the premium would be for a ninety year lease extension. Similar residencies in Bermondsey with a long lease were in the region of £252,800. The average ground rent payable was £65 collected monthly. The lease lapsed in 2090. Considering the 65 years remaining we approximated the compensation to the landlord for the lease extension to be between £17,100 and £19,800 not including fees.
An example of a Freehold Enfranchisement decision for a Bermondsey residence is 1-41 Royal Tower Lodge 40 Cartwright Street in April 2013. the tribunal adding the agreed value of capitalised ground rents and the reversion the price to be paid for the freehold was £1,187,000 This case related to 41 flats. The unexpired residue of the current lease was 107 years.