It’s an underpublicised truth that a North Shields residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the North Shields property market.Once your lease nears 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under 80 years - otherwise a higher amount will be due. The majority of leasehold owners in North Shields will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
Leasehold residencies in North Shields with over 100 years left 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 property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Regardless of whether you are a tenant or a freeholder in North Shields,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with North Shields valuers.
Henry was the the leasehold owner of a 2 bedroom flat in North Shields being sold with a lease of a little over fifty eight years unexpired. Henry informally spoke with his freeholder a well known London-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 subject to an increased rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Henry to exercise his statutory right. Henry procured expert advice and was able to make an informed judgement and handle with the matter and sell the property.
Last Autumn we were e-mailed by Dr L Gómez , who purchased a ground floor apartment in North Shields in January 2011. The dilemma was if we could approximate the premium would likely be to extend the lease by ninety years. Comparative residencies in North Shields with a long lease were valued about £245,000. The average ground rent payable was £50 billed quarterly. The lease ran out on 1 January 2093. Given that there were 68 years left we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of fees.
Last year we were called by Mr and Mrs. K François , who completed a ground floor flat in North Shields in June 2009. The question was if we could shed any light on how much (approximately) price would likely be for a ninety year lease extension. Comparable flats in North Shields with an extended lease were valued around £285,000. The mid-range ground rent payable was £55 billed every twelve months. The lease came to a finish on 13 November 2104. Having 79 years outstanding we calculated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 plus professional charges.