Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will normally be granted for a set period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Burnham. Inevitably, the period of lease left reduces as time goes by. This is often ignored and only becomes a problem when the property has to be disposed of or re-mortgaged. The fewer the years remaining the less it is worth and the more expensive it will be to procure a lease extension. Qualifying leaseholders in Burnham have the legal entitlement to extend the lease for an additional 90 years in accordance with statute. You should give due deliberation before putting off your Burnham lease extension. Holding off that expense now likely increases the price you will eventually incur to extend your lease
It is generally considered that a residential leasehold with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Regardless of whether you are a tenant or a landlord in Burnham,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Burnham valuers.
In recent months Luca, came dangerously near to the eighty-year threshold with the lease on his basement flat in Burnham. Having bought his home 19 years previously, the unexpired term was of little importance. Fortunately, it dawned on him that he would imminently be paying an escalated premium for a lease extension. Luca arranged for a lease extension just ahead of time last July. Luca and the freeholder via the managing agents in the end settled on an amount of £5,500 . If the lease had descended below eighty years, the figure would have escalated by a minimum £975.
In 2010 we were e-mailed by Mr and Mrs. H Roux who, having completed a first floor apartment in Burnham in October 2011. The dilemma was if we could estimate the price could be for a ninety year extension to my lease. Comparable residencies in Burnham with a long lease were in the region of £205,000. The mid-range amount of ground rent was £50 collected annually. The lease elapsed in 2104. Taking into account 79 years remaining we calculated the compensation to the landlord for the lease extension to be between £7,600 and £8,800 not including professional charges.
Mr and Mrs. V Bailey owned a first floor flat in Burnham in February 2003. The question was if we could estimate the price would be to prolong the lease by a further 90 years. Comparative homes in Burnham with a long lease were worth £275,000. The average ground rent payable was £65 invoiced annually. The lease concluded on 18 November 2093. Taking into account 68 years remaining we calculated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 plus costs.