It’s a harsh certainty that a Burnley residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Burnley property market.Once your lease nears 85ish years, you should start thinking about a lease extension. If the number of years remaining slips under eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most flat owners in Burnley will be able to extend under the legislation; however a conveyancer will be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer throughout the formalities.
It is generally considered that a property with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 30 years unexpired, the residence will be equivalent in value to a freehold for many years in the future.
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Using our service gives you better control over the value of your Burnley leasehold, as your property will be more valuable and saleable in respect of lease length should you wish 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.
In 2014 Reuben, started to get close to the 80-year threshold with the lease on his leasehold flat in Burnley. Having purchased his home 19 years ago, the lease term was of little interest. Thankfully, he became aware that he needed to take action soon on a lease extension. Reuben was able to extend his lease at the eleventh hour last August. Reuben and the landlord subsequently settled on the final figure of £5,500 . If the lease had slipped below 80 years, the sum would have become more exhorbitant by a minimum £1,050.
Last Autumn we were phoned by Mr and Mrs. C Martínez , who completed a one bedroom flat in Burnley in August 2002. The dilemma was if we could shed any light on how much (approximately) premium would be to extend the lease by a further 90 years. Comparable residencies in Burnley with a long lease were worth £254,200. The mid-range ground rent payable was £60 billed quarterly. The lease ran out in 2076. Considering the 51 years remaining we estimated the premium to the landlord to extend the lease to be within £43,700 and £50,600 not including costs.
Last Winter we were contacted by Dr Phoebe Lewis , who took over the lease of a basement apartment in Burnley in September 2005. We are asked if we could estimate the price would be for a 90 year lease extension. Comparable premises in Burnley with a long lease were in the region of £210,600. The average amount of ground rent was £45 invoiced every twelve months. The lease came to a finish in 2087. Having 62 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £18,100 and £20,800 not including legals.