If you are facing a significant premium because your lease in Little Burstead has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Top reasons for lease extension now:
A Little Burstead lease depreciates with the years remaining on the lease.
As the the remaining lease term of a Little Burstead domestic lease lessens so does its value and therefore the value of your property. Where the lease has, in excess of one hundred years to run then this decrease may be negligible that being said there will become a stage when a lease has less than 80 years remaining as part of the premium you will incur is what is termed as a marriage value. This could increase markedly the cost. It is the primary logic behind why you should extend the lease without delay. Many flat owners in Little Burstead will qualify for this right; nevertheless a lawyer can confirm whether you are eligible for a lease extension. In certain situations you may not qualify, the most common reason being that you have owned the property for under two years.
An extended lease is almost the same value as a freehold
It is generally accepted that a property with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
Banks and Building Societies may decide not to loan monies on a short lease
Most high street banks are tightening their criteria and a meaningful number now expect flats to have a minimum of sixty if not seventy years remaining once the mortgage has expired. As plenty of flats in Little Burstead were built in the fifties, sixties and seventies this means many now need to be extended if they wish to get a mortgage.
| 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.
|
| 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.
|
| 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.
|
| Halifax |
Minimum 70 years from the date of the mortgage.
|
| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
|
What makes us experts in Little Burstead lease extensions?
The lawyers 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 conveyancing solicitor we work with provide it.
Little Burstead Lease Extension Example Cases:
Nathan, Little Burstead, Essex,
Nathan owned a conversion flat in Little Burstead on the market with a lease of a little over 61 years left. Nathan on an informal basis spoke with 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 an increased rent to £100 yearly. No ground rent would be payable on a lease extension were Nathan to invoke his statutory right. Nathan procured expert advice and secured satisfactory deal informally and readily saleable.
Little Burstead case:
Last April we were e-mailed by Mrs N Rogers , who
was assigned a lease of a first floor flat in Little Burstead in August 2008. The dilemma was if we could approximate the price could be for a ninety year lease extension. Comparable flats in Little Burstead with an extended lease were worth £235,600. The average amount of ground rent was £60 collected every twelve months. The lease finished in 2088. Having 62 years as a residual term we approximated the compensation to the freeholder to extend the lease to be between £21,900 and £25,200 exclusive of fees.
Little Burstead case:
Last Spring we were phoned by Mr and Mrs. W Patel , who
acquired a first floor flat in Little Burstead in July 2000. We are asked if we could shed any light on how much (roughly) price would be for a ninety year lease extension. Similar residencies in Little Burstead with 100 year plus lease were worth £174,200. The mid-range ground rent payable was £55 collected per annum. The lease concluded in 2077. Given that there were 51 years left we approximated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 not including expenses.