Bury leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Bury residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Bury you should check if your lease has between 70 and ninety years remaining. There are good reasons why a Bury leaseholder with a lease having around eighty years unexpired should take steps to ensure that a lease extension is effected without delay
Leasehold premises in Bury with over 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| Halifax | 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 |
| 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 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 lawyer we work with provide it.
Subsequent to unsuccessful discussions with the landlord of her one bedroom flat in Bury, Lauren initiated the lease extension process just as her lease was nearing the crucial eighty-year threshold. The lease extension was finalised in October 2010. The landlord’s charges were kept to an absolute minimum.
Last Autumn we were called by Ms Catherine Ward , who purchased a ground floor apartment in Bury in May 1997. We are asked if we could estimate the premium could be for a ninety year extension to my lease. Comparative properties in Bury with a long lease were valued around £205,000. The average amount of ground rent was £50 invoiced per annum. The lease concluded on 12 June 2102. Considering the 78 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £7,600 and £8,800 plus fees.
In 2014 we were contacted by Mr Cameron Petit who, having was assigned a lease of a purpose-built apartment in Bury in May 2008. We are asked if we could approximate the premium would likely be for a ninety year lease extension. Identical homes in Bury with 100 year plus lease were in the region of £267,600. The average amount of ground rent was £65 invoiced monthly. The lease ran out on 5 April 2091. Considering the 67 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £14,300 and £16,400 exclusive of expenses.