The market value of a leasehold property in Peterlee depends on how long the lease has left to run. If it is close to or fewer than eighty years you should expect problems on re-sale, so it is advisable to arrange for the lease to be extended prior to purchasing. Ideally one should start the lease extension process when the lease still has 82 years remaining so that a lease extension can be concluded prior to the eighty year threshold. Statute enables Peterlee qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus an additional term of 90 years. The intention of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Peterlee with in excess of 100 years remaining 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 home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancers that we work with procure Peterlee 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.
Tommy owned a studio flat in Peterlee being sold with a lease of a few days over 59 years left. Tommy on an informal basis spoke with his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Tommy to exercise his statutory right. Tommy procured expert advice and secured an acceptable deal without resorting to tribunal and sell the property.
Dr W Norbert took over the lease of a one bedroom flat in Peterlee in June 2009. The dilemma was if we could shed any light on how much (approximately) price would likely be to extend the lease by ninety years. Similar premises in Peterlee with a long lease were valued around £260,000. The average amount of ground rent was £50 billed monthly. The lease ended on 19 November 2096. Having 71 years remaining we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 plus legals.
Last Winter we were called by Dr Felix Clark , who bought a basement apartment in Peterlee in August 2007. The dilemma was if we could estimate the compensation to the landlord could be for a ninety year lease extension. Comparative premises in Peterlee with an extended lease were in the region of £254,200. The mid-range amount of ground rent was £60 invoiced monthly. The lease finished in 2076. Having 51 years outstanding we estimated the premium to the freeholder to extend the lease to be within £43,700 and £50,600 exclusive of fees.