It’s a harsh certainty that a Peterlee residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Peterlee property market.Once your lease nears 85ish years, you need to start thinking about a lease extension. If the number of years remaining dips under 80 years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most flat owners in Peterlee will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
It is generally considered that a property with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years unexpired, the residence will be equivalent in value to a freehold for decades to come.
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. |
Bank of Scotland | Minimum 70 years from the date of the mortgage. |
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; |
Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
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.
Two years ago Sebastian, started to get close to the eighty-year mark with the lease on his two bedroom flat in Peterlee. In buying his home twenty years ago, the unexpired term was of little significance. Thankfully, he realised he would imminently be paying an escalated premium for a lease extension. Sebastian was able to extend his lease just under the wire in August. Sebastian and the freeholder eventually settled on sum of £5,000 . If the lease had fallen to less than 80 years, the amount would have escalated by at least £1,100.
Last March we were contacted by Mrs Hollie Jones , who moved into a one bedroom flat in Peterlee in January 1999. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by an additional years. Comparative properties in Peterlee with a long lease were in the region of £242,600. The mid-range amount of ground rent was £45 invoiced quarterly. The lease termination date was in 2091. Given that there were 67 years remaining we calculated the compensation to the landlord for the lease extension to be within £11,400 and £13,200 plus fees.
In 2011 we were contacted by Dr H Green who, having completed a one bedroom apartment in Peterlee in June 2005. The dilemma was if we could approximate the price would be for a ninety year extension to my lease. Comparable properties in Peterlee with a long lease were valued around £280,000. The average amount of ground rent was £55 billed annually. The lease ended in 2102. Considering the 78 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 exclusive of professional charges.