When it comes to domestic leasehold premises in Burbage and Hinckley, you are actually purchasing a right to live in a property for a set period of time. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may consider extending the lease sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive particularly when there are fewer than eighty years left. Residents in Burbage and Hinckley with a lease approaching 81 years unexpired should seriously consider extending it sooner than later. When a lease has below eighty years remaining, under the current Act the freeholder can calculate and levy a greater amount, based on a technical calculation, strangely termed as “marriage value” which is payable.
Leasehold properties in Burbage and Hinckley with over 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| 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. |
The conveyancing solicitors that we work with procure Burbage and Hinckley 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.
Kian was the the leasehold proprietor of a 2 bedroom apartment in Burbage and Hinckley on the market with a lease of just over sixty years left. Kian on an informal basis approached his freeholder being a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Kian to invoke his statutory right. Kian procured expert advice and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
In 2012 we were approached by Mr M Flores who, having completed a purpose-built apartment in Burbage and Hinckley in September 2006. We are asked if we could approximate the price could be to extend the lease by ninety years. Comparable flats in Burbage and Hinckley with a long lease were in the region of £295,000. The mid-range ground rent payable was £45 billed every twelve months. The lease expiry date was in 2099. Given that there were 74 years remaining we approximated the premium to the landlord to extend the lease to be within £9,500 and £11,000 not including legals.
Mr Y Parker acquired a one bedroom apartment in Burbage and Hinckley in July 2006. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year extension to my lease. Similar premises in Burbage and Hinckley with a long lease were in the region of £248,000. The average amount of ground rent was £65 billed monthly. The lease terminated on 24 July 2088. Given that there were 63 years left we estimated the premium to the landlord to extend the lease to be between £20,000 and £23,000 plus expenses.