When it comes to long leasehold premises in Burnham Market, you are actually buying an entitlement to live in a property for a set period of time. These days flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you should think about extending the lease sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly especially once there are less than eighty years remaining. Residents in Burnham Market with a lease approaching 81 years remaining should seriously think of extending it without delay. Once a lease has below eighty years left, under the current statute the freeholder can calculate and charge a greater premium, based on a technical calculation, known as “marriage value” which is payable.
Leasehold residencies in Burnham Market with over 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Godiva Mortgages | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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 handle 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.
During the course of the last few months Stanley, came perilously near to the eighty-year mark with the lease on his first floor apartment in Burnham Market. In buying his flat two decades ago, the unexpired term was of no importance. As luck would have it, he realised he would soon be paying an inflated amount for Extending the lease. Stanley was able to extend his lease just in the nick of time in April. Stanley and the freeholder in the end settled on the final figure of £5,500 . If the lease had dipped to less than 80 years, the premium would have increased by a minimum £875.
In 2013 we were contacted by Mr and Mrs. I Mason who, having was assigned a lease of a purpose-built flat in Burnham Market in September 2008. The question was if we could shed any light on how much (roughly) premium would likely be to prolong the lease by a further 90 years. Comparative flats in Burnham Market with a long lease were in the region of £261,600. The mid-range ground rent payable was £60 collected per annum. The lease concluded in 2078. Considering the 52 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £39,000 and £45,000 not including professional charges.
Dr J Davis bought a garden flat in Burnham Market in November 2000. The dilemma was if we could approximate the premium could be for a 90 year lease extension. Identical premises in Burnham Market with an extended lease were in the region of £218,000. The average ground rent payable was £45 collected quarterly. The lease finished on 18 June 2089. Taking into account 63 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £17,100 and £19,800 exclusive of legals.