Yarm On Tees leases on residential properties are gradually losing value. Where your lease has in the region of 90 years left, you should start thinking about a lease extension. It is important to recognise that it is that it is desirable for the lease extension to take place before the term of the current lease drops below eighty years - otherwise a higher premium will be payable. Leasehold owners in Yarm On Tees will usually be legally entitled to a lease extension; however It would be wise to check with a lawyer to check your eligibility. In certain situations you may not be entitled. There are also strict deadlines and steps to follow once the process has started so it’s wise to be guided by a conveyancer during the process.
Leasehold premises in Yarm On Tees 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 property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Yarm On Tees,the lease extension solicitors 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 Yarm On Tees valuers.
Last year Ryan, started to get close to the 80-year threshold with the lease on his one bedroom apartment in Yarm On Tees. In buying his flat 18 years previously, the unexpired term was of little significance. As luck would have it, it dawned on him that he needed to take steps soon on a lease extension. Ryan was able to extend his lease at the eleventh hour in April. Ryan and the landlord who owned the flat above subsequently agreed on a premium of £5,500 . If the lease had slipped below 80 years, the figure would have increased by a minimum £925.
Last Christmas we were contacted by Ms Maisie Alexander , who was assigned a lease of a one bedroom apartment in Yarm On Tees in August 2001. We are asked if we could approximate the price would be to extend the lease by ninety years. Comparable properties in Yarm On Tees with a long lease were worth £174,200. The average amount of ground rent was £55 invoiced per annum. The lease finished in 2076. Taking into account 51 years as a residual term we calculated the premium to the landlord for the lease extension to be within £31,400 and £36,200 not including professional charges.
Last month we were approach by Dr U Peterson , who took over the lease of a one bedroom apartment in Yarm On Tees in March 1999. The question was if we could estimate the premium would likely be to prolong the lease by a further 90 years. Comparable homes in Yarm On Tees with 100 year plus lease were worth £285,000. The average amount of ground rent was £45 invoiced annually. The lease expired in 2096. Taking into account 71 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 not including fees.