Unfortunately that a Bures residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Bures property prices.Where your lease has approximately 90 years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under eighty years - otherwise a higher amount will be payable. Most flat owners in Bures will be able to extend under the legislation; however a lawyer will be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
It is generally accepted that a property with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
Lease extensions in Bures can be a difficult process. We recommend you obtain professional help from a lawyer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Bures lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Two years ago Callum, started to get close to the eighty-year mark with the lease on his purpose- built flat in Bures. Having bought his flat two decades ago, the unexpired term was of little interest. As luck would have it, he realised he needed to take steps soon on Extending the lease. Callum extended the lease just under the wire in September. Callum and the landlord who owned the flat above ultimately settled on sum of £6,000 . If the lease had dipped to less than 80 years, the price would have become more exhorbitant by at least £1,100.
Mrs K Davis was assigned a lease of a one bedroom flat in Bures in July 2007. The dilemma was if we could approximate the compensation to the landlord would likely be to extend the lease by ninety years. Comparable properties in Bures with 100 year plus lease were in the region of £181,200. The mid-range ground rent payable was £65 billed every twelve months. The lease expiry date was in 2081. Taking into account 56 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £29,500 and £34,000 exclusive of fees.
In 2010 we were called by Ms Emily Walker who, having bought a basement apartment in Bures in October 2011. The dilemma was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparative flats in Bures with 100 year plus lease were valued about £242,600. The mid-range amount of ground rent was £45 invoiced monthly. The lease termination date was on 8 March 2092. Having 67 years unexpired we calculated the premium to the landlord for the lease extension to be within £11,400 and £13,200 plus expenses.