The value of Burton Latimer leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase materialy once the unexpired lease term is below than 80 years
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Chelsea 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
The conveyancers that we work with procure Burton Latimer 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.
Subsequent to protracted negotiations with the landlord of her basement flat in Burton Latimer, Emily commenced the lease extension process just as her lease was coming close to the crucial eighty-year deadline. The transaction was finalised in February 2011. The landlord’s charges were kept to an absolute minimum.
Mr and Mrs. T Gunderson moved into a first floor flat in Burton Latimer in August 1997. We are asked if we could approximate the compensation to the landlord would be for a ninety year lease extension. Similar flats in Burton Latimer with an extended lease were valued about £193,400. The mid-range amount of ground rent was £65 collected per annum. The lease came to a finish on 23 April 2085. Given that there were 59 years outstanding we calculated the compensation to the landlord to extend the lease to be between £21,900 and £25,200 plus professional charges.
Ms Abigail Morel took over the lease of a one bedroom apartment in Burton Latimer in June 1997. The dilemma was if we could approximate the compensation to the landlord would be to prolong the lease by an additional years. Comparable properties in Burton Latimer with 100 year plus lease were valued about £255,000. The average ground rent payable was £50 collected yearly. The lease termination date was on 26 January 2096. Considering the 70 years as a residual term we approximated the premium to the landlord for the lease extension to be within £10,500 and £12,000 not including costs.