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Why you should start your Consett lease extension


Why you should start your Consett lease extension today:

Increase your lease and increase your Consett property value

Unfortunately that a Consett residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Consett property prices.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 50% 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 additional value that a lease extension will add the property The majority of flat owners in Consett will be able to extend under the legislation; however a lawyer will be able to confirm if you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer for the duration of the formalities.

Consett property with a lease extension is almost the same value as a freehold

Leasehold properties in Consett with over one hundred years left on the lease are sometimes regarded as a ‘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 reversionary interest unless savings on ground rent and estate charges merit it.

Lending institutions may decide not to lend on a short lease

Mortgage lenders have specific criteria when loaning funds charged on leasehold property. Some will simply refuse lend at all once the remaining lease term slips under a specified unexpired lease term. Many Lending institutions will not consider property with an unexpired term of less than seventy years as acceptable security. In addition to this being important when selling, it is also relevant if you are intending to refinance your Consett home.

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.
Santander You must report the unexpired lease term to us and await our instructions if:
1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or
2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or
3. no valuation report is provided
However, we will not accept a lease where on expiry of the mortgage:
(i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or
(ii) less than 30 years remain and the loan is repaid on a capital and interest basis

We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder.
TSB Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.
Virgin 85 years at the time of completion. If it's less, we require it to be extended on or before completion.
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.

What makes us experts in Consett lease extensions?

The conveyancing solicitors that we work with procure Consett 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 conveyancer we work with provide it.

Consett Lease Extension Example Cases:

Callum, Consett, County Durham,

Callum owned a 2 bedroom flat in Consett being sold with a lease of a few days over sixty years unexpired. Callum informally contacted his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Callum to invoke his statutory right. Callum procured expert legal guidance and was able to make an informed decision and deal with the matter and sell the property.

Consett case:

Ms Francesca Petit moved into a newly refurbished flat in Consett in October 1996. We are asked if we could approximate the compensation to the landlord could be for a 90 year lease extension. Comparable premises in Consett with a long lease were worth £280,000. The mid-range amount of ground rent was £45 invoiced quarterly. The lease end date was on 12 March 2094. Having 70 years as a residual term we approximated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 not including legals.

Consett case:

Last year we were contacted by Dr Rachel Bailey , who acquired a studio flat in Consett in June 2011. We are asked if we could approximate the price could be to extend the lease by a further 90 years. Identical properties in Consett with an extended lease were valued about £218,400. The mid-range amount of ground rent was £60 invoiced every twelve months. The lease terminated on 18 September 2083. Given that there were 59 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £27,600 and £31,800 not including fees.