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. Legislation has been in place for sometime now allowing qualifying Billingham residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Billingham you should check if your lease has between 70 and 90 years left. There are compelling reasons why a Billingham flat owner with a lease having around 80 years unexpired should take steps to ensure that a lease extension is put in place without delay
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
Engaging our service will provide you enhanced 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 want 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.
Luca was the the leasehold proprietor of a 2 bedroom apartment in Billingham on the market with a lease of a few days over fifty eight years remaining. Luca on an informal basis spoke with his landlord a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £50 annually. No ground rent would be payable on a lease extension were Luca to invoke his statutory right. Luca obtained expert advice and was able to make a more informed decision and handle with the matter and ending up with a market value flat.
Mrs Chelsea Edwards purchased a ground floor apartment in Billingham in April 1999. We are asked if we could estimate the premium would likely be for a 90 year lease extension. Similar properties in Billingham with a long lease were valued about £223,400. The mid-range amount of ground rent was £60 billed every twelve months. The lease elapsed on 12 November 2084. Having 59 years remaining we approximated the compensation to the landlord to extend the lease to be between £27,600 and £31,800 not including costs.
Last Summer we were e-mailed by Ms C González , who owned a one bedroom flat in Billingham in October 2008. We are asked if we could estimate the price would be to extend the lease by 90 years. Comparable properties in Billingham with a long lease were valued about £205,000. The mid-range ground rent payable was £50 invoiced yearly. The lease lapsed on 26 August 2104. Taking into account 79 years left we calculated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus costs.