With a residential leasehold property in Bishop Auckland, you are actually purchasing an entitlement to reside in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive especially when there are fewer than eighty years remaining. Residents in Bishop Auckland with a lease approaching 81 years left should seriously consider extending it without delay. Once a lease has under eighty years remaining, under the current statute the freeholder can calculate and charge a greater amount, based on a technical computation, known as “marriage value” which is due.
Leasehold residencies in Bishop Auckland with over one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and service charges justify it.
| 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; |
| Chelsea 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
The lawyers that we work with handle Bishop Auckland 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.
Connor was the the leasehold owner of a studio flat in Bishop Auckland being marketed with a lease of fraction over 72 years remaining. Connor on an informal basis contacted his landlord being a well known London-based freehold company for a lease extension. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Connor to invoke his statutory right. Connor obtained expert legal guidance and was able to make an informed decision and handle with the matter and ending up with a market value flat.
Last Spring we were called by Mr and Mrs. S Leroy , who bought a one bedroom apartment in Bishop Auckland in May 2009. The question was if we could approximate the premium would likely be to extend the lease by an additional years. Identical properties in Bishop Auckland with a long lease were in the region of £240,600. The average amount of ground rent was £60 collected quarterly. The lease came to a finish on 23 April 2087. Considering the 62 years outstanding we estimated the premium to the landlord for the lease extension to be between £21,900 and £25,200 not including professional charges.
In 2009 we were contacted by Mr and Mrs. B David who, having completed a recently refurbished apartment in Bishop Auckland in September 2002. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by a further 90 years. Comparable flats in Bishop Auckland with an extended lease were in the region of £174,200. The mid-range ground rent payable was £55 invoiced quarterly. The lease expiry date was on 19 June 2076. Having 51 years left we approximated the compensation to the freeholder to extend the lease to be within £31,400 and £36,200 plus fees.