Yarm leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Yarm tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Yarm you must check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Yarm with more than 100 years outstanding 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 premises. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake Yarm 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 conveyancer we work with provide it.
Connor was the the leasehold proprietor of a studio apartment in Yarm being sold with a lease of just over sixty years unexpired. Connor informally spoke with his landlord a well known Manchester-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 subject to a new rent initially set at £200 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Connor to invoke his statutory right. Connor procured expert advice and was able to make an informed judgement and deal with the matter and sell the flat.
In 2014 we were contacted by Dr K Mercier who, having purchased a newly refurbished flat in Yarm in July 2010. We are asked if we could approximate the price would be for a ninety year lease extension. Identical homes in Yarm with a long lease were valued about £290,000. The average amount of ground rent was £45 collected quarterly. The lease ran out on 14 June 2097. Having 73 years left we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of fees.
Mr D Adams moved into a one bedroom apartment in Yarm in October 2004. We are asked if we could shed any light on how much (roughly) premium would be for a ninety year lease extension. Comparable homes in Yarm with an extended lease were valued around £240,600. The average amount of ground rent was £60 invoiced monthly. The lease ended on 18 November 2086. Considering the 62 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £21,900 and £25,200 not including legals.