For anyone whose Billingham property is held on a long lease, our message is clear – if you ignore the situation, the property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to extend the lease.
Leasehold residencies in Billingham with more than 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges warrant it.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Godiva Mortgages | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you better control over the value of your Billingham leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
George was the the leasehold owner of a high value flat in Billingham being sold with a lease of a few days over 61 years remaining. George informally contacted his freeholder being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were George to invoke his statutory right. George obtained expert advice and was able to make an informed judgement and handle with the matter and readily saleable.
In 2014 we were called by Dr L Wood who, having acquired a garden apartment in Billingham in November 1995. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year extension to my lease. Identical residencies in Billingham with a long lease were worth £260,200. The mid-range ground rent payable was £65 invoiced monthly. The lease finished on 22 January 2092. Having 66 years left we approximated the premium to the landlord for the lease extension to be within £15,200 and £17,600 exclusive of costs.
Last November we were approach by Mr and Mrs. K Edwards , who moved into a basement apartment in Billingham in October 1997. We are asked if we could approximate the compensation to the landlord would be to extend the lease by an additional years. Comparative premises in Billingham with 100 year plus lease were worth £198,800. The average ground rent payable was £55 collected per annum. The lease terminated on 2 October 2081. Having 55 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £33,300 and £38,400 exclusive of fees.