Little Burstead Lease Extension - Free Consultation

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Why you should commence your Little Burstead lease extension


Main reasons to commence your Little Burstead lease extension today:

A Little Burstead lease depreciates with the years remaining on the lease.

With a domestic leasehold premises in Little Burstead, you are in fact renting it for a certain amount of time. These days flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may think about a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly notably once there are fewer than eighty years remaining. Anyone in Little Burstead with a lease drawing near to 81 years remaining should seriously consider extending it without delay. When a lease has under 80 years left, under the relevant statute the landlord is entitled to calculate and demand a larger amount, assessed on a technical multiplication, known as “marriage value” which is payable.

Little Burstead property with a lease extension has roughly the same value as a freehold

Leasehold premises in Little Burstead with over one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges merit it.

Banks and Building Societies may not grant a mortgage on a short lease

The propensity since 2008 has been for lenders to tighten lending requirements across the board - this has extended to the types of security over which the mortgage is to be granted. This has resulted in the unexpired lease term required by banks has increased. Historically lenders were content with twenty years plus the term of the loan - routinely 50 year leases but those requirements evolved by the requirement for lengthy leases - many use a minimum term of 75 years as a prerequisite.

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 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;
Godiva Mortgages 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.
Virgin 85 years at the time of completion. If it's less, we require it to be extended on or before completion.
Yorkshire 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.

Get in touch with one of our Little Burstead lease extension solicitors or enfranchisement solicitors

Regardless of whether you are a tenant or a landlord in Little Burstead,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Little Burstead valuers.

Little Burstead Lease Extension Example Cases:

Rory, Little Burstead, Essex

In 2014 Rory, came very close to the 80-year mark with the lease on his studio flat in Little Burstead. In buying his property twenty years ago, the length of the lease was of little importance. Thankfully, he realised he needed to take action soon on a lease extension. Rory extended the lease just under the wire last June. Rory and the freeholder subsequently settled on the final figure of £5,000 . If the lease had dropped below eighty years, the sum would have become more costly by a minimum £850.

Little Burstead case:

Last year we were called by Mr Ben Jones , who bought a one bedroom apartment in Little Burstead in September 1997. We are asked if we could shed any light on how much (approximately) premium would be for a 90 year lease extension. Comparative flats in Little Burstead with 100 year plus lease were in the region of £300,000. The mid-range amount of ground rent was £50 collected annually. The lease lapsed on 1 August 2100. Taking into account 75 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 plus legals.

Little Burstead case:

Last Autumn we were phoned by Dr Henry Reed , who was assigned a lease of a studio flat in Little Burstead in February 2005. The dilemma was if we could approximate the premium would be to extend the lease by 90 years. Identical properties in Little Burstead with an extended lease were worth £252,800. The average amount of ground rent was £65 collected per annum. The lease elapsed on 12 August 2090. Given that there were 65 years left we calculated the compensation to the landlord to extend the lease to be between £18,100 and £20,800 exclusive of legals.