Unfortunately that a Billingham residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Billingham property market.Once your lease nears 85ish years, you should start thinking about a lease extension. If lease term slips below 80 years, you will end up paying half 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 extra value that a lease extension will add the property Most leasehold owners in Billingham will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer for the duration of the formalities.
It is generally considered that a property with more than one hundred years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 years left, the property will be worth the same as a freehold for many years in the future.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake Billingham 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 conveyancing solicitor we work with provide it.
Subsequent to lengthy negotiations with the landlord of her garden apartment in Billingham, Alisha started the lease extension process just as her lease was coming close to the critical 80-year threshold. The transaction was finalised in July 2014. The landlord’s fees were negotiated to about 700 GBP.
Mr W King bought a studio flat in Billingham in October 1995. The question was if we could estimate the price could be to prolong the lease by ninety years. Similar flats in Billingham with a long lease were valued about £210,000. The mid-range ground rent payable was £50 collected every twelve months. The lease expired on 4 January 2106. Taking into account 80 years as a residual term we estimated the premium to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of legals.
In 2011 we were e-mailed by Mr and Mrs. W Wood who, having owned a first floor flat in Billingham in February 2005. The question was if we could approximate the premium would be for a 90 year extension to my lease. Comparative homes in Billingham with a long lease were worth £275,000. The mid-range amount of ground rent was £45 invoiced yearly. The lease finished in 2095. Considering the 69 years as a residual term we approximated the premium to the landlord for the lease extension to be within £12,400 and £14,200 exclusive of legals.