There is no doubt about it a leasehold property in Burnley is a wasting asset as a result of the diminishing lease term. If the residual term has, more than 100 years to run then this decrease may be of little impact however there will become a stage when a lease has fewer than eighty years left as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary reason why you should extend the lease without delay. Most flat owners in Burnley will qualify for this right; that being said a lawyer can advise if you qualify for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
Leasehold residencies in Burnley with in excess of one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date 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. |
| 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. |
Using our service gives you enhanced control over the value of your Burnley leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Sam owned a 2 bedroom flat in Burnley on the market with a lease of a little over fifty eight years left. Sam informally spoke with his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £125 annually. Ordinarily, ground rent would not be payable on a lease extension were Sam to invoke his statutory right. Sam procured expert legal guidance and was able to make a more informed judgement and handle with the matter and sell the flat.
Last month we were e-mailed by Dr Millie Walker , who bought a first floor flat in Burnley in November 2012. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Similar homes in Burnley with an extended lease were valued about £200,800. The average ground rent payable was £65 billed yearly. The lease came to a finish in 2086. Taking into account 60 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £20,900 and £24,200 not including legals.
Ms P Carter purchased a studio apartment in Burnley in July 2002. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year lease extension. Comparable homes in Burnley with an extended lease were valued around £255,000. The average ground rent payable was £50 collected annually. The lease concluded in 2097. Considering the 71 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 plus fees.