Unfortunately that a Berwick Upon Tweed residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Berwick Upon Tweed property prices.Once your lease nears 85ish years, you should start considering a lease extension. If the number of years remaining falls below 80 years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Berwick Upon Tweed will be able to extend under the legislation; however a lawyer will be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancer throughout the process.
It is generally accepted that a residential leasehold with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years unexpired, the property will be worth the same as 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 Berwick Upon Tweed 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.
Andrew was the the leasehold proprietor of a 2 bedroom apartment in Berwick Upon Tweed on the market with a lease of a little over sixty years remaining. Andrew on an informal basis spoke with his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £50 per annum. Ordinarily, ground rent would not be due on a lease extension were Andrew to invoke his statutory right. Andrew procured expert advice and was able to make an informed judgement and deal with the matter and sell the property.
In 2011 we were approached by Dr Yasmin Cook who, having owned a one bedroom flat in Berwick Upon Tweed in April 1995. We are asked if we could estimate the price would likely be to prolong the lease by ninety years. Similar properties in Berwick Upon Tweed with an extended lease were valued around £184,000. The average amount of ground rent was £55 invoiced per annum. The lease ended on 2 April 2078. Having 53 years remaining we calculated the premium to the freeholder to extend the lease to be within £28,500 and £33,000 plus fees.
In 2010 we were contacted by Mr and Mrs. K Young who, having acquired a newly refurbished apartment in Berwick Upon Tweed in April 2001. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year lease extension. Comparative premises in Berwick Upon Tweed with 100 year plus lease were worth £290,000. The average ground rent payable was £45 billed per annum. The lease elapsed in 2098. Taking into account 73 years remaining we approximated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 plus fees.