For anyone whose Little Burstead flat is held on a long lease, the message is clear – if no remedial action is taken, your property will eventually revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more expensive it will be to extend the lease.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
Irrespective of whether you are a tenant or a landlord in Little Burstead,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 Little Burstead valuers.
Isaac owned a studio flat in Little Burstead being sold with a lease of a few days over fifty eight years outstanding. Isaac informally contacted his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Isaac to invoke his statutory right. Isaac obtained expert legal guidance and secured an acceptable resolution without going to tribunal and ending up with a market value flat.
Mr and Mrs. R Nguyen took over the lease of a ground floor flat in Little Burstead in September 1996. We are asked if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Comparative homes in Little Burstead with an extended lease were worth £285,000. The average ground rent payable was £45 billed per annum. The lease ran out on 2 May 2098. Considering the 72 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of fees.
Last Christmas we were e-mailed by Dr O Fournier , who was assigned a lease of a garden apartment in Little Burstead in October 2003. The question was if we could estimate the price would likely be to extend the lease by 90 years. Identical properties in Little Burstead with an extended lease were worth £233,200. The average amount of ground rent was £60 billed every twelve months. The lease ended in 2087. Taking into account 61 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £22,800 and £26,400 exclusive of expenses.