With a domestic leasehold premises in Bury St Edmunds, you are in fact renting it for a certain amount of time. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly particularly when there are less than eighty years remaining. Anyone in Bury St Edmunds with a lease drawing near to 81 years remaining should seriously consider extending it as soon as possible. Once the lease term has below eighty years outstanding, under the current legislation the freeholder can calculate and levy a greater premium, assessed on a technical multiplication, strangely termed as “marriage value” which is due.
It is generally considered that a property with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The conveyancing solicitors that we work with handle Bury St Edmunds 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.
Blake was the the leasehold owner of a 2 bedroom apartment in Bury St Edmunds on the market with a lease of a few days over 61 years outstanding. Blake informally spoke with his freeholder a well known local-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £50 yearly. No ground rent would be due on a lease extension were Blake to exercise his statutory right. Blake obtained expert legal guidance and secured satisfactory resolution informally and readily saleable.
Mr and Mrs. E Ramírez acquired a basement flat in Bury St Edmunds in February 1997. The dilemma was if we could shed any light on how much (roughly) premium would be to extend the lease by an additional years. Identical flats in Bury St Edmunds with a long lease were in the region of £290,000. The mid-range amount of ground rent was £60 collected annually. The lease end date was on 17 April 2105. Having 80 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 plus legals.
Mr and Mrs. C Collins completed a garden apartment in Bury St Edmunds in June 2008. We are asked if we could estimate the price would likely be for a ninety year extension to my lease. Similar homes in Bury St Edmunds with an extended lease were valued about £200,800. The mid-range ground rent payable was £65 billed quarterly. The lease ran out on 15 July 2085. Having 60 years as a residual term we calculated the premium to the landlord for the lease extension to be within £20,900 and £24,200 plus professional charges.