The value of Little Burstead leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase materialy once the unexpired lease term is less than 80 years
It is conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the equivalent 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 decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake Little Burstead 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.
Off the back of lengthy correspondence with the landlord of her first floor flat in Little Burstead, Chantelle initiated the lease extension process as the 80 year mark was rapidly advancing. The transaction completed in June 2007. The landlord’s fees were kept to an absolute minimum.
In 2009 we were phoned by Mr and Mrs. T Leroy who, having completed a purpose-built apartment in Little Burstead in September 2004. The question was if we could approximate the price would be for a ninety year extension to my lease. Comparable homes in Little Burstead with an extended lease were in the region of £275,000. The average amount of ground rent was £65 invoiced annually. The lease termination date was on 14 August 2094. Taking into account 68 years left we estimated the premium to the landlord to extend the lease to be between £12,400 and £14,200 exclusive of fees.
In 2010 we were phoned by Mr Alex Patel who, having acquired a purpose-built apartment in Little Burstead in March 1997. The dilemma was if we could approximate the price would be for a ninety year lease extension. Comparative homes in Little Burstead with 100 year plus lease were worth £208,600. The mid-range amount of ground rent was £60 billed annually. The lease ran out in 2083. Taking into account 57 years as a residual term we calculated the compensation to the landlord to extend the lease to be within £30,400 and £35,200 plus expenses.