The market value of Bury leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can escalate significantly once the unexpired lease term is less than 80 years
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| Godiva Mortgages | 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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 lawyers that we work with procure Bury 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.
In 2014 Zachary, started to get close to the 80-year mark with the lease on his basement flat in Bury. Having bought his property two decades ago, the unexpired term was of little interest. by good luck, he recognised he needed to take action soon on Extending the lease. Zachary was able to extend his lease just ahead of time in June. Zachary and the landlord ultimately settled on an amount of £6,000 . If the lease had fallen to less than eighty years, the amount would have become more exhorbitant by a minimum £875.
Last Spring we were e-mailed by Mr and Mrs. P Morgan , who completed a one bedroom apartment in Bury in February 1999. The dilemma was if we could estimate the price would likely be to extend the lease by an additional years. Comparable homes in Bury with an extended lease were worth £250,400. The average amount of ground rent was £65 collected annually. The lease terminated on 23 November 2089. Considering the 64 years left we estimated the premium to the landlord to extend the lease to be within £19,000 and £22,000 plus expenses.
In 2013 we were e-mailed by Mr and Mrs. T Rivera who, having owned a ground floor apartment in Bury in March 1999. The question was if we could estimate the compensation to the landlord would be to extend the lease by an additional years. Comparable premises in Bury with an extended lease were worth £191,400. The average ground rent payable was £55 billed every twelve months. The lease came to a finish in 2079. Given that there were 54 years remaining we calculated the compensation to the landlord to extend the lease to be between £34,200 and £39,600 exclusive of fees.