The basic rule is, all other things holding equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Burnley may extend the lease for an additional 90 years under Leasehold Reform legislation. Please think carefully before delaying your Burnley lease extension. Putting off the costs today simply escalates the price you will ultimately have to pay to extend the lease.
Leasehold premises in Burnley with over one hundred years outstanding 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 circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Leeds Building Society | 85 years remaining from the start 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| 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. |
Retaining our service will provide you increased 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 want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Aaron was the the leasehold owner of a 2 bedroom apartment in Burnley on the market with a lease of a few days over 72 years unexpired. Aaron informally spoke with his freeholder a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Aaron to exercise his statutory right. Aaron obtained expert advice and secured satisfactory resolution informally and sell the property.
In 2011 we were contacted by Dr Leo Bell who, having bought a first floor flat in Burnley in August 2003. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by a further 90 years. Identical residencies in Burnley with an extended lease were valued around £193,400. The mid-range ground rent payable was £65 collected annually. The lease expired on 16 July 2085. Given that there were 59 years as a residual term we approximated the premium to the landlord for the lease extension to be within £21,900 and £25,200 plus expenses.
In 2013 we were approached by Mr and Mrs. N Roux who, having was assigned a lease of a ground floor apartment in Burnley in March 1995. We are asked if we could estimate the price would likely be to prolong the lease by ninety years. Comparative residencies in Burnley with a long lease were worth £255,000. The average ground rent payable was £50 collected per annum. The lease came to a finish on 9 February 2096. Given that there were 70 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £10,500 and £12,000 plus fees.