Bury St Edmunds 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. It is the case that most Bury St Edmunds tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Bury St Edmunds you should investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is generally considered that a property with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years unexpired, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service will provide you better control over the value of your Bury St Edmunds leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Sam was the the leasehold owner of a high value apartment in Bury St Edmunds being marketed with a lease of a few days over sixty years remaining. Sam informally spoke with his freeholder being a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £100 per annum. Ordinarily, ground rent would not be due on a lease extension were Sam to exercise his statutory right. Sam procured expert advice and was able to make an informed judgement and deal with the matter and readily saleable.
Last Spring we were contacted by Dr F Leroy , who owned a one bedroom flat in Bury St Edmunds in March 2009. The question was if we could approximate the premium would be for a 90 year extension to my lease. Identical premises in Bury St Edmunds with an extended lease were in the region of £208,200. The average amount of ground rent was £65 billed per annum. The lease ended on 17 February 2086. Given that there were 61 years left we estimated the compensation to the freeholder to extend the lease to be between £19,000 and £22,000 exclusive of fees.
Last Christmas we were e-mailed by Mr and Mrs. V Miller , who owned a one bedroom apartment in Bury St Edmunds in January 2006. The dilemma was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Similar properties in Bury St Edmunds with 100 year plus lease were worth £260,000. The average ground rent payable was £50 collected per annum. The lease concluded on 14 August 2097. Having 72 years outstanding we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including expenses.