The re-sale value of a leasehold property in Bury depends on how many years the lease has left to run. If it is near to or less than 80 years you should anticipate problems on re-sale, so it is recommended to arrange for a lease extension prior to buying. It is preferable to start the process of extending the lease is when the lease still has 82 years remaining so that a lease extension can be concluded well before the 80 year mark. Leasehold Reform legislation entitles Bury qualifying lessees to acquire a lease extension of ninety years in addition to the remaining length of the lease at a peppercorn rent (that is, rent free). The reason of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Bury with over 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service gives you enhanced control over the value of your Bury leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Connor, started to get close to the eighty-year mark with the lease on his one bedroom flat in Bury. In buying his flat twenty years previously, the lease term was of little relevance. Luckily, he recognised he would imminently be paying way over the odds for Extending the lease. Connor was able to extend his lease just under the wire last July. Connor and the landlord who owned the flat above subsequently settled on an amount of £5,500 . If the lease had dropped below 80 years, the price would have gone up by at least £950.
In 2011 we were approached by Mrs R Rodríguez who, having was assigned a lease of a newly refurbished apartment in Bury in November 2009. We are asked if we could approximate the price could be for a 90 year extension to my lease. Identical residencies in Bury with an extended lease were worth £181,600. The average amount of ground rent was £55 billed every twelve months. The lease lapsed on 4 February 2078. Taking into account 52 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £30,400 and £35,200 exclusive of fees.
Last Autumn we were approach by Mr and Mrs. V Martin , who was assigned a lease of a basement flat in Bury in September 1998. We are asked if we could estimate the premium would be for a 90 year extension to my lease. Comparative properties in Bury with a long lease were valued around £285,000. The average ground rent payable was £45 billed quarterly. The lease terminated on 27 March 2098. Having 72 years unexpired we approximated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 not including fees.