Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will normally be granted for a fixed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Peterlee. Inevitably, the length of lease left shortens over time. This may slip by relatively unnoticed when the residence has to be sold or re-mortgaged. The shorter the lease the lower the value of the property and the more it will cost to extend the lease. Eligible leaseholders in Peterlee have the right to extend the lease for an additional ninety years under Leasehold Reform legislation. You should give careful consideration before putting off your Peterlee lease extension. Putting off the cost now only increases the price you will ultimately incur for a lease extension
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
Regardless of whether you are a tenant or a landlord in Peterlee,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Peterlee valuers.
Archie was the the leasehold proprietor of a studio apartment in Peterlee on the market with a lease of fraction over 72 years left. Archie informally spoke with his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Archie to invoke his statutory right. Archie procured expert legal guidance and secured an acceptable deal without going to tribunal and ending up with a market value flat.
Dr S Reed took over the lease of a one bedroom apartment in Peterlee in July 2008. We are asked if we could estimate the premium would likely be for a 90 year lease extension. Comparative residencies in Peterlee with 100 year plus lease were valued around £255,000. The mid-range ground rent payable was £50 collected every twelve months. The lease elapsed on 28 July 2095. Given that there were 70 years remaining we estimated the premium to the landlord to extend the lease to be within £10,500 and £12,000 exclusive of legals.
Ms O Nguyen took over the lease of a newly refurbished flat in Peterlee in August 2001. We are asked if we could approximate the price would likely be to extend the lease by 90 years. Identical premises in Peterlee with a long lease were worth £246,800. The mid-range ground rent payable was £60 collected yearly. The lease ran out in 2075. Taking into account 50 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £44,700 and £51,600 exclusive of legals.