Billingham 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 your lease gets more expensive. Most owners of residential leasehold property in Billingham enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Billingham you really ought to investigate if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Billingham with more than one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service will provide you increased control over the value of your Billingham leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Finley owned a conversion apartment in Billingham being marketed with a lease of just over fifty eight years remaining. Finley informally approached his landlord a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Finley to invoke his statutory right. Finley procured expert advice and secured an acceptable resolution without resorting to tribunal and readily saleable.
Mr and Mrs. S Campbell took over the lease of a one bedroom flat in Billingham in April 2005. The question was if we could estimate the premium would be to prolong the lease by ninety years. Similar homes in Billingham with 100 year plus lease were valued around £285,000. The average ground rent payable was £45 collected yearly. The lease finished in 2096. Taking into account 71 years unexpired we estimated the premium to the landlord for the lease extension to be between £12,400 and £14,200 not including costs.
In 2013 we were phoned by Dr Alfie Bonnet who, having bought a first floor apartment in Billingham in February 2006. We are asked if we could approximate the premium would be for a 90 year lease extension. Identical properties in Billingham with 100 year plus lease were worth £225,800. The average ground rent payable was £60 billed every twelve months. The lease came to a finish in 2085. Taking into account 60 years outstanding we approximated the premium to the landlord for the lease extension to be between £23,800 and £27,400 not including expenses.