Bolsover leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Bolsover tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Bolsover you would be well advised to check if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold residencies in Bolsover with in excess of 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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. |
Regardless of whether you are a tenant or a freeholder in Bolsover,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Bolsover valuers.
Ibrahim owned a conversion apartment in Bolsover on the market with a lease of fraction over 59 years unexpired. Ibrahim informally spoke with his landlord being a well known Manchester-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £125 annually. No ground rent would be due on a lease extension were Ibrahim to exercise his statutory right. Ibrahim obtained expert advice and secured an acceptable deal informally and ending up with a market value flat.
In 2010 we were called by Mr and Mrs. Y Moore who, having purchased a ground floor apartment in Bolsover in September 2008. The question was if we could shed any light on how much (approximately) premium would likely be for a ninety year extension to my lease. Comparative homes in Bolsover with an extended lease were in the region of £260,200. The average ground rent payable was £65 invoiced yearly. The lease concluded on 24 July 2091. Having 66 years remaining we estimated the compensation to the landlord to extend the lease to be between £16,200 and £18,600 plus costs.
Mr and Mrs. R Phillips was assigned a lease of a basement flat in Bolsover in April 2002. We are asked if we could estimate the price could be for a 90 year lease extension. Comparative properties in Bolsover with 100 year plus lease were valued about £198,800. The mid-range ground rent payable was £55 billed quarterly. The lease ended on 3 April 2080. Considering the 55 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £33,300 and £38,400 not including legals.