It’s a harsh truth that a Burslem residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Burslem property prices.Where your lease has approximately 90 years left, you need to start considering a lease extension. If lease term slips below eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most flat owners in Burslem will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold properties in Burslem with more than one hundred years remaining 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 situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 |
The conveyancing solicitors that we work with handle Burslem 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 lawyer we work with provide it.
Subsequent to unsuccessful correspondence with the freeholder of her leasehold flat in Burslem, Hannah started the lease extension process as the 80 year mark was rapidly advancing. The legal work completed in November 2010. The freeholder’s costs were restricted to approximately 550 pounds.
Dr Ashleigh Davis completed a one bedroom apartment in Burslem in September 2007. We are asked if we could estimate the premium would likely be for a 90 year extension to my lease. Comparable properties in Burslem with an extended lease were worth £260,000. The average amount of ground rent was £50 collected annually. The lease terminated in 2097. Given that there were 72 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of legals.
Last Christmas we were phoned by Mr Owen James , who bought a ground floor apartment in Burslem in February 2012. The question was if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year lease extension. Comparable residencies in Burslem with 100 year plus lease were in the region of £256,600. The mid-range ground rent payable was £60 billed quarterly. The lease terminated on 13 October 2077. Considering the 52 years as a residual term we calculated the compensation to the landlord to extend the lease to be within £39,000 and £45,000 exclusive of expenses.