Barnard Castle leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Barnard Castle residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Barnard Castle you must see if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you enhanced control over the value of your Barnard Castle leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Archie was the the leasehold owner of a studio flat in Barnard Castle being marketed with a lease of just over sixty years outstanding. Archie on an informal basis approached his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £50 yearly. No ground rent would be payable on a lease extension were Archie to invoke his statutory right. Archie obtained expert legal guidance and was able to make an informed judgement and handle with the matter and sell the property.
Last Winter we were e-mailed by Mr and Mrs. H Rivera , who acquired a garden apartment in Barnard Castle in March 1999. The dilemma was if we could estimate the compensation to the landlord would be to extend the lease by 90 years. Comparative homes in Barnard Castle with 100 year plus lease were in the region of £176,200. The mid-range ground rent payable was £65 invoiced per annum. The lease came to a finish on 21 June 2082. Having 56 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £29,500 and £34,000 exclusive of expenses.
Ms T Bertrand purchased a one bedroom apartment in Barnard Castle in August 2011. The question was if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Identical residencies in Barnard Castle with a long lease were worth £242,600. The average ground rent payable was £45 collected every twelve months. The lease finished in 2093. Taking into account 67 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £11,400 and £13,200 plus costs.