For anyone whose Little Burstead property is held on a long lease, our message is clear – if you ignore the situation, your property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more expensive it will be to extend the lease.
It is generally accepted that a residential leasehold with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
The conveyancing solicitors that we work with handle 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 conveyancing solicitor we work with provide it.
Following unsuccessful negotiations with the freeholder of her one bedroom flat in Little Burstead, Isabelle started the lease extension process just as her lease was approaching the all-important 80-year deadline. The transaction completed in April 2005. The landlord’s costs were restricted to below 450 GBP.
Last year we were approach by Ms Sarah Ali , who acquired a studio apartment in Little Burstead in April 2000. We are asked if we could approximate the premium would be to extend the lease by ninety years. Comparative premises in Little Burstead with 100 year plus lease were valued around £225,800. The mid-range amount of ground rent was £60 collected quarterly. The lease finished in 2086. Given that there were 60 years as a residual term we estimated the premium to the landlord to extend the lease to be within £25,700 and £29,600 plus costs.
Last Winter we were e-mailed by Mrs Aimee Jackson , who bought a basement flat in Little Burstead in February 2005. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Similar properties in Little Burstead with a long lease were in the region of £210,000. The mid-range ground rent payable was £50 billed per annum. The lease lapsed in 2106. Given that there were 80 years left we approximated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 plus legals.