It’s a harsh truth that a Bermondsey residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Bermondsey property prices.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If lease term falls under 80 years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most flat owners in Bermondsey will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is conventional wisdom that a property 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 left, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
The conveyancing solicitors that we work with procure 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 lawyer we work with provide it.
Arthur was the the leasehold owner of a high value flat in Bermondsey on the market with a lease of a little over 72 years unexpired. Arthur informally approached his landlord being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Arthur to exercise his statutory right. Arthur obtained expert advice and was able to make a more informed decision and handle with the matter and ending up with a market value flat.
Mrs P Allen moved into a one bedroom apartment in Bermondsey in January 2008. The dilemma was if we could shed any light on how much (approximately) price would be for a ninety year lease extension. Comparable residencies in Bermondsey with a long lease were worth £200,000. The average ground rent payable was £50 collected annually. The lease expired on 27 June 2102. Having 77 years left we approximated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of expenses.
An example of a Freehold Enfranchisement decision 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 was in relation to 41 flats. The unexpired residue of the current lease was 107 years.