Burwell leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Burwell tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Burwell you must check if your lease has between 70 and 90 years remaining. There are good reasons why a Burwell leaseholder with a lease having around eighty years left should take steps to ensure that a lease extension is effected without delay
It is generally accepted 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 property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Yorkshire 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. |
Regardless of whether you are a tenant or a freeholder in Burwell,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Burwell valuers.
In recent months Jayden, came dangerously close to the eighty-year threshold with the lease on his two bedroom flat in Burwell. In buying his property two decades ago, the unexpired term was of no concern. As luck would have it, he became aware that he needed to take action soon on Extending the lease. Jayden arranged for a lease extension at the eleventh hour last April. Jayden and the landlord who owned the flat above ultimately settled on a premium of £5,000 . If he had missed the deadline, the price would have gone up by a minimum £1,100.
In 2011 we were approached by Mrs G Ramírez who, having purchased a first floor flat in Burwell in September 2011. We are asked if we could estimate the premium would be to extend the lease by ninety years. Comparative flats in Burwell with a long lease were valued about £210,000. The mid-range ground rent payable was £50 invoiced quarterly. The lease expiry date was on 19 May 2105. Considering the 80 years remaining we approximated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of fees.
In 2012 we were approached by Mrs Ella Torres who, having acquired a garden apartment in Burwell in September 2005. The dilemma was if we could approximate the price could be for a 90 year extension to my lease. Similar properties in Burwell with 100 year plus lease were valued around £275,000. The mid-range amount of ground rent was £45 collected yearly. The lease came to a finish in 2094. Considering the 69 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 not including fees.