The re-sale value of a leasehold property in Blackburn is impacted by how many years the lease has left to run. If it is close to or fewer than eighty years you should expect problems on re-sale, so it is advisable to arrange for the lease to be extended prior to purchasing. It is preferable to commence the process of extending the lease is when a lease still has 82 years remaining so that all matters can be finalised ahead of the 80 year cut off point. Current legislation enables Blackburn qualifying lessees to acquire a lease extension of 90 years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The reason of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Blackburn with more than 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| 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. |
| 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. |
| 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 conveyancing solicitors that we work with procure Blackburn 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.
Oscar owned a studio apartment in Blackburn being sold with a lease of a few days over sixty years outstanding. Oscar on an informal basis approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 per annum. No ground rent would be payable on a lease extension were Oscar to invoke his statutory right. Oscar procured expert legal guidance and was able to make a more informed decision and handle with the matter and ending up with a market value flat.
Last Spring we were phoned by Mr Alexander Brown , who moved into a one bedroom flat in Blackburn in March 2006. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be to extend the lease by ninety years. Similar properties in Blackburn with 100 year plus lease were worth £218,000. The average amount of ground rent was £45 billed monthly. The lease came to a finish on 14 June 2089. Having 63 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £17,100 and £19,800 exclusive of costs.
In 2012 we were phoned by Dr C Clark who, having owned a one bedroom flat in Blackburn in August 2011. The dilemma was if we could shed any light on how much (roughly) premium could be for a 90 year lease extension. Identical premises in Blackburn with 100 year plus lease were in the region of £265,000. The average amount of ground rent was £50 billed every twelve months. The lease end date was in 2100. Having 74 years remaining we calculated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of professional charges.