Burnham Market residential property held on a long lease is a wasting asset because a leaseholder merely owns the property for a set term.
It is generally considered that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years unexpired, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The conveyancers that we work with procure Burnham Market 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 lawyer we work with provide it.
Last Autumn Eli, came very close to the 80-year threshold with the lease on his basement flat in Burnham Market. In buying his home twenty years previously, the unexpired term was of no concern. by good luck, he became aware that he would imminently be paying way over the odds for a lease extension. Eli extended the lease just under the wire in September. Eli and the freeholder in the end agreed on sum of £5,500 . If he failed to meet the deadline, the figure would have escalated by a minimum £950.
In 2013 we were contacted by Mr and Mrs. C Ali who, having acquired a basement flat in Burnham Market in April 2012. The dilemma was if we could approximate the price could be for a 90 year lease extension. Comparable homes in Burnham Market with 100 year plus lease were worth £270,000. The average amount of ground rent was £55 collected every twelve months. The lease terminated in 2100. Taking into account 75 years as a residual term we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus expenses.
In 2014 we were e-mailed by Mr Nathan Morris who, having owned a studio apartment in Burnham Market in July 2003. We are asked if we could estimate the price would likely be for a 90 year extension to my lease. Similar homes in Burnham Market with a long lease were in the region of £168,800. The average ground rent payable was £60 invoiced annually. The lease terminated on 28 February 2080. Considering the 55 years left we estimated the premium to the landlord to extend the lease to be between £31,400 and £36,200 exclusive of costs.