Unfortunately that a Billingham residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Billingham property prices.Once your lease gets to 85ish years, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under 80 years - otherwise a higher premium will be payable. The majority of flat owners in Billingham will be able to extend under the legislation; however a lawyer should be able to clarify if you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the process.
It is generally accepted that a property with more than one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| 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. |
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 decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Riley, started to get close to the 80-year threshold with the lease on his studio apartment in Billingham. Having purchased his property two decades ago, the lease term was of no relevance. by good luck, he became aware that he would imminently be paying way over the odds for Extending the lease. Riley was able to extend his lease just in the nick of time in May. Riley and the landlord ultimately agreed on an amount of £6,000 . If he failed to meet the deadline, the premium would have escalated by a minimum £1,125.
In 2010 we were approached by Dr Jasper James who, having took over the lease of a first floor apartment in Billingham in September 2008. We are asked if we could approximate the price could be for a 90 year extension to my lease. Identical residencies in Billingham with 100 year plus lease were valued about £295,000. The mid-range ground rent payable was £50 collected quarterly. The lease ran out in 2100. Taking into account 75 years remaining we approximated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 not including costs.
Last Summer we were e-mailed by Dr Reuben Pérez , who took over the lease of a studio flat in Billingham in June 2011. The question was if we could approximate the premium would likely be to extend the lease by 90 years. Comparative homes in Billingham with 100 year plus lease were valued about £250,400. The average ground rent payable was £65 billed per annum. The lease ran out on 18 October 2089. Having 64 years unexpired we approximated the premium to the landlord for the lease extension to be within £19,000 and £22,000 not including legals.