Owning a flat usually means owning a lease of the property, which has a finite term of years. This lease will usually be granted for a fixed period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Berwick Upon Tweed. Inevitably, the period of lease remaining reduces as time goes by. This may slip by relatively unnoticed when the residence needs to be disposed of or refinanced. The fewer the years remaining the less it is worth and the more it will cost to procure a lease extension. Eligible long lease owners in Berwick Upon Tweed have the right to extend the lease for an additional 90 years in accordance with the 1993 Leasehold Reform Act. Do give due consideration before putting off your Berwick Upon Tweed lease extension. Putting off that expense now likely increases the price you will eventually incur to extend your lease
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| 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. |
| Halifax | 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. |
| 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. |
Using our service will provide you enhanced control over the value of your Berwick Upon Tweed leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last October Oliver, started to get near to the eighty-year threshold with the lease on his garden flat in Berwick Upon Tweed. In buying his flat two decades ago, the unexpired term was of no interest. by good luck, he noticed he needed to take steps soon on a lease extension. Oliver arranged for a lease extension at the eleventh hour last May. Oliver and the freeholder via the managing agents subsequently settled on the final figure of £5,500 . If the lease had gone below eighty years, the sum would have gone up by a minimum £1,100.
In 2009 we were phoned by Mr and Mrs. D Watson who, having acquired a basement apartment in Berwick Upon Tweed in October 1997. We are asked if we could approximate the price would be to prolong the lease by 90 years. Similar residencies in Berwick Upon Tweed with 100 year plus lease were worth £285,000. The mid-range amount of ground rent was £45 invoiced per annum. The lease came to a finish on 10 January 2097. Given that there were 72 years unexpired we estimated the premium to the landlord to extend the lease to be within £12,400 and £14,200 not including professional charges.
In 2013 we were phoned by Mr and Mrs. J Ricardo who, having acquired a purpose-built apartment in Berwick Upon Tweed in April 2003. The question was if we could approximate the premium would likely be to prolong the lease by a further 90 years. Identical homes in Berwick Upon Tweed with 100 year plus lease were valued about £233,200. The average ground rent payable was £60 invoiced monthly. The lease finished on 5 October 2086. Given that there were 61 years outstanding we estimated the premium to the freeholder to extend the lease to be between £22,800 and £26,400 exclusive of professional charges.