With a domestic leasehold property in Burnham, you are actually purchasing an entitlement to reside in a property for a prescribed time frame. 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 may think about extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly particularly once there are less than eighty years remaining. Residents in Burnham with a lease approaching 81 years unexpired should seriously think of extending it sooner than later. Once a lease has less than eighty years outstanding, under the relevant Act the landlord can calculate and levy a larger amount, based on a technical calculation, known as “marriage value” which is payable.
Leasehold residencies in Burnham with more than 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges warrant 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; |
| Chelsea 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 conveyancers that we work with handle Burnham 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 conveyancing solicitor we work with provide it.
Finn owned a 2 bedroom flat in Burnham on the market with a lease of a few days over fifty eight years left. Finn informally spoke with his freeholder being a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £125 annually. No ground rent would be due on a lease extension were Finn to exercise his statutory right. Finn procured expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Last month we were approach by Dr Natalie Clarke , who acquired a purpose-built apartment in Burnham in March 2000. We are asked if we could approximate the premium would be for a ninety year extension to my lease. Identical residencies in Burnham with an extended lease were worth £191,400. The average amount of ground rent was £55 invoiced per annum. The lease ended on 13 October 2080. Having 54 years remaining we estimated the premium to the landlord for the lease extension to be between £34,200 and £39,600 exclusive of costs.
Mr and Mrs. L Garcia was assigned a lease of a basement apartment in Burnham in July 2003. We are asked if we could estimate the price could be to prolong the lease by a further 90 years. Comparable residencies in Burnham with an extended lease were worth £295,000. The average amount of ground rent was £45 collected monthly. The lease end date was on 9 July 2100. Given that there were 74 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 plus expenses.