The value of Durham leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate significantly once the remaining term is below than 80 years
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years left, the premises will be equivalent in value to 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service will provide you increased control over the value of your Durham leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Ollie, came precariously near to the eighty-year threshold with the lease on his two bedroom flat in Durham. Having bought his home 19 years previously, the lease term was of no interest. Thankfully, he noticed he needed to take action soon on Extending the lease. Ollie arranged for a lease extension just ahead of time in September. Ollie and the landlord who owned the flat above eventually agreed on an amount of £5,500 . If the lease had fallen to less than 80 years, the figure would have become more costly by at least £1,100.
Last year we were contacted by Mr and Mrs. V Martínez , who completed a purpose-built apartment in Durham in May 1996. We are asked if we could approximate the price could be to extend the lease by an additional years. Similar properties in Durham with an extended lease were valued about £176,200. The average ground rent payable was £65 invoiced every twelve months. The lease concluded on 2 November 2082. Having 56 years outstanding we approximated the premium to the freeholder to extend the lease to be between £29,500 and £34,000 not including professional charges.
Last Christmas we were phoned by Mr and Mrs. D Richardson , who completed a garden apartment in Durham in April 1996. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Identical flats in Durham with a long lease were valued around £242,600. The mid-range amount of ground rent was £45 invoiced yearly. The lease lapsed in 2093. Having 67 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £11,400 and £13,200 exclusive of expenses.