When it comes to residential leasehold premises in Bermondsey, you are actually buying an entitlement to live in a property for a set period of time. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you should think about extending the lease sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly especially when there are less than eighty years remaining. Residents in Bermondsey with a lease approaching 81 years unexpired should seriously consider extending it as soon as possible. Once the lease term has below eighty years outstanding, under the current Act the freeholder is entitled to calculate and charge a larger amount, based on a technical calculation, known as “marriage value” which is payable.
Leasehold residencies in Bermondsey with over one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
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Retaining our service will provide you increased 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 have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of unsuccessful discussions with the landlord of her garden flat in Bermondsey, Phoebe started the lease extension process as the eighty year threshold was quickly advancing. The legal work completed in February 2005. The freeholder’s costs were kept to an absolute minimum.
Mr E Peterson purchased a one bedroom apartment in Bermondsey in October 2004. The dilemma was if we could approximate the compensation to the landlord would be to extend the lease by a further 90 years. Similar properties in Bermondsey with a long lease were valued about £300,000. The mid-range amount of ground rent was £50 invoiced quarterly. The lease came to a finish in 2102. Having 76 years left we calculated the premium to the landlord to extend the lease to be within £8,600 and £9,800 plus legals.
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 related to 41 flats. The number of years remaining on the existing lease(s) was 107 years.