As the length of the unexpired term of a Beadnell residential lease lessens so does its value and therefore the value of your property. If the lease has, in excess of 125 years remaining then this decrease may be of little impact that being said there will become a stage when a lease has under than eighty years left as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the main reason why you should consider extending sooner rather than later. Most flat owners in Beadnell will meet the qualifying criteria; that being said a conveyancing solicitor can advise if you qualify for a lease extension. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a residential leasehold with over 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 45 years unexpired, the property will be worth the same as a freehold for many years in the future.
| 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; |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
The conveyancing solicitors that we work with handle Beadnell 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.
Twenty four months ago Evan, came perilously close to the 80-year threshold with the lease on his basement flat in Beadnell. Having bought his flat 19 years ago, the unexpired term was of no relevance. Fortunately, he recognised he needed to take steps soon on Extending the lease. Evan arranged for a lease extension just under the wire last July. Evan and the freeholder via the managing agents subsequently agreed on a premium of £5,000 . If the lease had fallen to less than eighty years, the amount would have increased by at least £950.
Ms G Morgan purchased a purpose-built apartment in Beadnell in June 1999. We are asked if we could estimate the price would likely be for a ninety year lease extension. Comparable flats in Beadnell with 100 year plus lease were worth £255,000. The average ground rent payable was £50 invoiced every twelve months. The lease elapsed in 2096. Having 71 years left we approximated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 not including costs.
Mr and Mrs. M Ward was assigned a lease of a garden flat in Beadnell in March 2009. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a ninety year lease extension. Comparable homes in Beadnell with an extended lease were worth £254,200. The average amount of ground rent was £60 collected annually. The lease lapsed in 2076. Taking into account 51 years remaining we estimated the compensation to the freeholder to extend the lease to be within £43,700 and £50,600 plus expenses.