Burton upon Trent leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Burton upon Trent residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Burton upon Trent you would be well advised to check if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
It is generally accepted that a property with over one hundred years remaining is worth roughly the same 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 |
|---|---|
| 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. |
| 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 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; |
| 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. |
| 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. |
Regardless of whether you are a tenant or a landlord in Burton upon Trent,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Burton upon Trent valuers.
In the wake of 6 months of unsuccessful discussions with the freeholder of her one bedroom apartment in Burton upon Trent, Isobel initiated the lease extension process as the 80 year threshold was fast approaching. The lease extension was concluded in November 2013. The freeholder’s charges were restricted to a tad over 550 pounds.
Last year we were approach by Mr Toby Jackson , who bought a one bedroom flat in Burton upon Trent in July 2004. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by ninety years. Comparable residencies in Burton upon Trent with 100 year plus lease were worth £208,600. The average ground rent payable was £60 invoiced monthly. The lease end date was in 2082. Given that there were 57 years unexpired we approximated the premium to the freeholder for the lease extension to be within £30,400 and £35,200 plus professional charges.
Dr W Kelly took over the lease of a basement flat in Burton upon Trent in March 2005. The dilemma was if we could estimate the premium could be to extend the lease by ninety years. Comparative properties in Burton upon Trent with a long lease were in the region of £200,000. The mid-range amount of ground rent was £50 invoiced quarterly. The lease terminated in 2102. Given that there were 77 years remaining we estimated the premium to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of costs.