Burnley leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Burnley tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Burnley you must investigate if your lease has between seventy and 90 years remaining. There are compelling reasons why a Burnley flat owner with a lease having around eighty years remaining should take steps to ensure that a lease extension is actioned without delay
Leasehold premises in Burnley with more than 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 Burnley,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Burnley valuers.
Charlie owned a 2 bedroom apartment in Burnley being marketed with a lease of a little over fifty eight years remaining. Charlie informally spoke with his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Charlie to invoke his statutory right. Charlie procured expert advice and was able to make an informed judgement and handle with the matter and readily saleable.
Mr and Mrs. F Bernard moved into a one bedroom apartment in Burnley in January 2005. We are asked if we could estimate the premium would likely be for a ninety year extension to my lease. Comparable premises in Burnley with an extended lease were in the region of £173,800. The mid-range ground rent payable was £65 invoiced quarterly. The lease expired in 2079. Considering the 55 years remaining we calculated the premium to the landlord to extend the lease to be between £31,400 and £36,200 plus fees.
In 2010 we were contacted by Mr H Rodríguez who, having moved into a one bedroom apartment in Burnley in October 1996. We are asked if we could approximate the premium would be to prolong the lease by 90 years. Comparable homes in Burnley with an extended lease were worth £235,200. The mid-range ground rent payable was £45 collected annually. The lease expired in 2090. Having 66 years unexpired we calculated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 not including costs.