Byker and Walker leases on residential properties are gradually losing value. Where your lease has approximately ninety years left, you should start thinking about a lease extension. If lease term falls under eighty years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Flat owners in Byker and Walker will usually qualify for a lease extension; however a solicitor should be able check if you qualify. In certain cases you may not be entitled. There are prescribed deadlines and steps to follow once the process has commenced so it’s wise to be guided by a conveyancer during the process.
It is generally accepted that a residential leasehold with more than one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 conveyancers that we work with undertake Byker and Walker 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 lawyer we work with provide it.
Last October Max, came dangerously close to the eighty-year threshold with the lease on his one bedroom apartment in Byker and Walker. In buying his home two decades ago, the unexpired term was of minimal relevance. Thankfully, he recognised he would soon be paying an inflated amount for Extending the lease. Max arranged for a lease extension just under the wire in January. Max and the landlord eventually settled on a premium of £5,000 . If he had missed the deadline, the amount would have become more exhorbitant by at least £1,100.
In 2011 we were approached by Dr John Torres who, having purchased a one bedroom apartment in Byker and Walker in August 2007. The dilemma was if we could shed any light on how much (approximately) price would be to prolong the lease by an additional years. Similar properties in Byker and Walker with 100 year plus lease were worth £246,800. The average amount of ground rent was £60 invoiced annually. The lease came to a finish in 2075. Having 50 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £44,700 and £51,600 plus expenses.
Last July we were approach by Mr Andrew Davis , who owned a recently refurbished apartment in Byker and Walker in October 2005. The question was if we could estimate the premium would be to prolong the lease by a further 90 years. Identical premises in Byker and Walker with a long lease were valued about £203,200. The mid-range ground rent payable was £65 billed quarterly. The lease expired in 2086. Given that there were 61 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £19,000 and £22,000 not including expenses.