With a long leasehold premises in Burgess Hill, you are actually buying a right to live in a property for a prescribed time frame. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you should think about extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive especially when there are less than 80 years remaining. Leasehold owners in Burgess Hill with a lease approaching 81 years unexpired should seriously consider extending it sooner than later. Once a lease has below eighty years remaining, under the relevant Act the landlord can calculate and levy a larger premium, based on a technical multiplication, known as “marriage value” which is payable.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with undertake Burgess Hill 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.
Max was the the leasehold owner of a conversion flat in Burgess Hill on the market with a lease of fraction over 72 years remaining. Max on an informal basis contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £200 yearly. No ground rent would be payable on a lease extension were Max to invoke his statutory right. Max obtained expert legal guidance and secured an acceptable deal informally and sell the flat.
In 2012 we were phoned by Mr Henry Gómez who, having moved into a recently refurbished apartment in Burgess Hill in May 2012. The question was if we could estimate the price would likely be for a ninety year lease extension. Comparable residencies in Burgess Hill with an extended lease were valued about £242,600. The mid-range amount of ground rent was £45 billed annually. The lease terminated on 1 July 2093. Considering the 67 years unexpired we approximated the premium to the landlord to extend the lease to be between £11,400 and £13,200 exclusive of costs.
In 2011 we were called by Dr Riley Morris who, having bought a recently refurbished flat in Burgess Hill in June 2004. We are asked if we could estimate the price could be to extend the lease by a further 90 years. Similar properties in Burgess Hill with 100 year plus lease were worth £280,000. The average amount of ground rent was £55 collected monthly. The lease expired on 13 July 2104. Given that there were 78 years outstanding we approximated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 exclusive of fees.