Owning a apartment usually means owning a lease of the property, which has a set term of years. The lease will usually be granted for a fixed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Bury. Clearly, the period of lease left shortens over time. This is often overlooked and only raises itself as an issue when the flat or house needs to be sold or refinanced. The shorter the lease the less it is worth and the more it will cost to obtain a lease extension. Qualifying long lease owners in Bury have the legal entitlement to extend the lease for an additional ninety years in accordance with legislation. Do give due consideration before putting off your Bury lease extension. Putting off the cost now likely increases the price you will ultimately have to pay to extend your lease
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 |
Regardless of whether you are a tenant or a landlord in Bury,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 experience and the close ties they enjoy with Bury valuers.
Harrison was the the leasehold owner of a conversion apartment in Bury being marketed with a lease of fraction over sixty years left. Harrison on an informal basis approached his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to an increased rent to £100 annually. No ground rent would be payable on a lease extension were Harrison to exercise his statutory right. Harrison procured expert advice and was able to make a more informed judgement and deal with the matter and sell the flat.
In 2014 we were contacted by Mr and Mrs. C Rivera who, having took over the lease of a ground floor flat in Bury in March 1998. We are asked if we could shed any light on how much (approximately) price would be to extend the lease by a further 90 years. Similar premises in Bury with an extended lease were worth £205,000. The mid-range amount of ground rent was £50 collected monthly. The lease concluded in 2105. Taking into account 79 years left we approximated the compensation to the landlord for the lease extension to be within £7,600 and £8,800 not including professional charges.
Last Christmas we were phoned by Mrs Lydia Sánchez , who purchased a garden apartment in Bury in April 2010. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year extension to my lease. Comparative flats in Bury with 100 year plus lease were worth £270,000. The average ground rent payable was £65 billed quarterly. The lease expired on 3 March 2094. Given that there were 68 years unexpired we estimated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of professional charges.