Bermondsey residential property owned on a long lease is a depreciating asset because a leaseholder only owns the property for a set term.
It is conventional wisdom that a property with in excess of 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 premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you enhanced control over the value of your Bermondsey leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of protracted negotiations with the landlord of her garden flat in Bermondsey, Shannon initiated the lease extension process just as the lease was coming close to the critical 80-year deadline. The transaction was finalised in May 2007. The landlord’s fees were negotiated to about 600 pounds.
Last Christmas we were called by Mr and Mrs. E Dupont , who purchased a basement flat in Bermondsey in June 1998. We are asked if we could estimate the price would likely be to extend the lease by 90 years. Comparable properties in Bermondsey with an extended lease were in the region of £208,600. The mid-range ground rent payable was £60 collected quarterly. The lease expired in 2082. Considering the 57 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £30,400 and £35,200 plus professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Bermondsey property 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 affected 41 flats. The unexpired lease term was 107 years.