It’s a harsh certainty that a Burnopfield residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Burnopfield property prices.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If the number of years remaining falls below 80 years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Burnopfield will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines 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 conventional wisdom that a property with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years left, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with handle Burnopfield lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Off the back of lengthy negotiations with the freeholder of her purpose-built apartment in Burnopfield, Erin commenced the lease extension process just as her lease was nearing the critical 80-year mark. The legal work completed in October 2008. The freeholder’s fees were kept to an absolute minimum.
In 2013 we were approached by Mrs Maisie Lefèvre who, having owned a one bedroom flat in Burnopfield in February 2009. We are asked if we could estimate the premium would likely be for a ninety year lease extension. Identical flats in Burnopfield with a long lease were in the region of £200,000. The average amount of ground rent was £50 invoiced every twelve months. The lease finished on 17 June 2104. Given that there were 78 years left we approximated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of legals.
Mr and Mrs. S Williams completed a studio apartment in Burnopfield in September 2003. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by ninety years. Comparable homes in Burnopfield with an extended lease were in the region of £267,600. The average ground rent payable was £65 invoiced quarterly. The lease came to a finish in 2093. Having 67 years remaining we estimated the compensation to the landlord to extend the lease to be between £14,300 and £16,400 exclusive of expenses.