If you are facing a significant premium because your lease in Burnley has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Main reasons to start your Burnley lease extension today:
Increase your lease and increase your Burnley property value
The re-sale value of a leasehold property in Burnley depends on how many years the lease has remaining. If it is close to or fewer than 80 years you should anticipate difficulties on re-sale, so it is recommended to arrange for a lease extension before buying. It is preferable to commence the process of extending the lease is when a lease still has 82 years to run so that all matters can be concluded in advance of the eighty year mark. Current legislation entitles Burnley qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus a supplemental term of ninety years. The intention of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
An extended lease is almost the same value as a freehold
Leasehold residencies in Burnley with more than 100 years unexpired on the lease are sometimes regarded as a ‘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 buying the freehold unless savings on ground rent and service charges merit it.
Banks and Building Societies may decide not to finance a property on a short lease
Lending institutions have set criteria when lending monies secured on leasehold homes. Many will simply refuse lend at all once the remaining lease term slips lower than a specified unexpired lease term. Many Banks and Building Societies will not consider property with an unexpired below 75 years as acceptable security. In addition to this being important when selling, it is also relevant if you are seeking to remortgage your Burnley property.
| Lender |
Requirement
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|---|
| Bank of Scotland |
Minimum 70 years from the date of the mortgage.
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| 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.
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| Halifax |
Minimum 70 years from the date of the mortgage.
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| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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| 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.
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What makes us experts in Burnley lease extensions?
Regardless of whether you are a tenant or a landlord in Burnley,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 experience and the close ties they enjoy with Burnley valuers.
Burnley Lease Extension Case Summaries:
Jordan, Burnley, Lancashire,
Subsequent to lengthy correspondence with the landlord of her two bedroom apartment in Burnley, Jordan commenced the lease extension process as the 80 year mark was rapidly nearing. The lease extension was finalised in May 2005. The freeholder’s costs were restricted to a tad over 500 pounds.
Burnley case:
Mr Jackson Watson bought a one bedroom flat in Burnley in May 2010. The dilemma was if we could approximate the compensation to the landlord would likely be to extend the lease by ninety years. Similar homes in Burnley with 100 year plus lease were valued about £173,800. The mid-range ground rent payable was £60 invoiced per annum. The lease ran out on 10 October 2081. Given that there were 55 years unexpired we estimated the compensation to the landlord for the lease extension to be between £31,400 and £36,200 not including legals.
Burnley case:
Dr Chantelle Harris purchased a one bedroom apartment in Burnley in July 2008. The dilemma was if we could approximate the compensation to the landlord would be to prolong the lease by 90 years. Comparable premises in Burnley with an extended lease were valued around £235,200. The mid-range ground rent payable was £45 invoiced every twelve months. The lease expired on 10 August 2092. Considering the 66 years outstanding we approximated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 not including costs.