It’s an underpublicised certainty that a Bures residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Bures property market.Where your lease has approximately ninety years left, you need to start thinking about 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 slips lower than 80 years - otherwise a higher amount will be payable. Most leasehold owners in Bures will be able to extend under the legislation; however a conveyancer will be able to clarify if you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the formalities.
Leasehold properties in Bures with in excess of 100 years left 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 to be gained by buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| 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 |
Regardless of whether you are a tenant or a freeholder in Bures,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Bures valuers.
Caleb was the the leasehold owner of a conversion apartment in Bures being sold with a lease of fraction over 61 years left. Caleb informally contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 yearly. Ordinarily, ground rent would not be payable on a lease extension were Caleb to invoke his statutory right. Caleb obtained expert legal guidance and was able to make an informed decision and deal with the matter and ending up with a market value flat.
Last Christmas we were called by Mr Lewis Sharif , who moved into a first floor apartment in Bures in June 2011. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by 90 years. Similar properties in Bures with a long lease were valued about £166,400. The mid-range ground rent payable was £60 billed yearly. The lease expired in 2079. Considering the 54 years unexpired we estimated the compensation to the landlord for the lease extension to be between £32,300 and £37,400 exclusive of legals.
Dr Niamh Kelly owned a ground floor apartment in Bures in August 1995. The question was if we could shed any light on how much (approximately) premium would be for a ninety year lease extension. Identical properties in Bures with a long lease were worth £225,400. The mid-range ground rent payable was £45 collected every twelve months. The lease concluded on 20 July 2089. Given that there were 64 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £15,200 and £17,600 plus legals.