Burford leases on residential deteriorating in value. Where your lease has approximately ninety years remaining, you should start considering the need for a lease extension. If lease term is less than 80 years, you will then be required to pay 50% of the property's 'marriage value' on top of the standard cost of the lease extension to your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Leasehold owners in Burford will mostly be legally entitled to a lease extension; however a solicitor will confirm if you qualify. In certain circumstances you may not qualify. There are prescribed timetables and steps to comply with once the process has started so it’s prudent to be guided by a conveyancer during the process.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Lease extensions in Burford can be a difficult process. We recommend you secure professional help from a conveyancer and surveyor with experience in lease extensions.
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 procuring Burford lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In 2014 Henry, came critically close to the 80-year threshold with the lease on his basement flat in Burford. In buying his property twenty years previously, the length of the lease was of little interest. Luckily, he became aware that he would soon be paying an escalated premium for Extending the lease. Henry was able to extend his lease just in the nick of time last March. Henry and the freeholder subsequently settled on sum of £6,000 . If the lease had dropped to less than 80 years, the price would have become more costly by a minimum £950.
Mr and Mrs. B Lee took over the lease of a studio flat in Burford in October 2005. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by a further 90 years. Comparative premises in Burford with 100 year plus lease were worth £205,000. The mid-range amount of ground rent was £50 billed monthly. The lease concluded in 2104. Given that there were 79 years as a residual term we approximated the premium to the landlord to extend the lease to be within £7,600 and £8,800 exclusive of costs.
In 2010 we were phoned by Dr Sarah Phillips who, having bought a ground floor apartment in Burford in October 2004. We are asked if we could shed any light on how much (approximately) price could be to extend the lease by ninety years. Similar residencies in Burford with a long lease were valued about £275,000. The average ground rent payable was £65 collected yearly. The lease finished in 2093. Taking into account 68 years remaining we estimated the premium to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of legals.