The re-sale value of a leasehold property in Durham is impacted by how long the lease has left to run. If it is near to or fewer than 80 years you should envisage problems on re-sale, so it is recommended to arrange for the lease to be extended prior to purchasing. It is preferable to commence the process of extending the lease is when the lease still has 82 years to run so that all matters can be addressed in advance of the 80 year mark. Leasehold Reform legislation enables Durham qualifying lessees to acquire a lease extension of 90 years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The intention of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Durham with more than one hundred years outstanding 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 premises. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges justify it.
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Retaining our service gives you better control over the value of your Durham leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Reuben, started to get close to the 80-year mark with the lease on his two bedroom flat in Durham. In buying his home 18 years ago, the length of the lease was of no relevance. As luck would have it, he recognised he needed to take steps soon on a lease extension. Reuben arranged for a lease extension just under the wire in August. Reuben and the freeholder via the management company ultimately agreed on sum of £5,500 . If the lease had slid below 80 years, the amount would have escalated by a minimum £900.
Last Autumn we were e-mailed by Dr Archie François , who purchased a first floor apartment in Durham in July 2010. The question was if we could shed any light on how much (approximately) price could be for a ninety year lease extension. Comparable flats in Durham with a long lease were valued about £191,000. The average amount of ground rent was £65 invoiced per annum. The lease finished in 2083. Given that there were 58 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £23,800 and £27,400 plus costs.
Last Christmas we were called by Mr and Mrs. C Cook , who was assigned a lease of a garden apartment in Durham in September 2009. The question was if we could approximate the price would likely be for a ninety year lease extension. Comparable flats in Durham with 100 year plus lease were in the region of £250,000. The mid-range amount of ground rent was £50 billed yearly. The lease concluded on 25 March 2094. Given that there were 69 years left we calculated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus costs.