The nearer a residential lease in Durham gets to zero years unexpired, the more it reduces the value of the property. If the lease has, more than one hundred years remaining then this decrease may be of little impact however there will become a stage when a lease has less than eighty years left as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary rational as to why you should consider extending sooner than later. Many flat owners in Durham will meet the qualifying criteria; nevertheless a conveyancing solicitor should be able to advise if you are eligible to extend your lease. In certain situations you may not qualify, the most common reason being that you have owned the property for less than two years.
Leasehold residencies in Durham with over 100 years remaining 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 circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Retaining our service will provide you better control over the value of your Durham leasehold, as your property will be more valuable and saleable in respect of lease length should you wish 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.
Subsequent to unsuccessful negotiations with the landlord of her one bedroom flat in Durham, Natalie started the lease extension process just as her lease was nearing the crucial 80-year deadline. The lease extension was concluded in April 2015. The freeholder’s charges were negotiated to below 550 GBP.
Last Spring we were called by Mr and Mrs. F Flores , who owned a first floor apartment in Durham in October 2009. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year extension to my lease. Identical properties in Durham with 100 year plus lease were worth £250,000. The average amount of ground rent was £50 invoiced annually. The lease came to a finish in 2093. Considering the 68 years remaining we approximated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 not including fees.
Last Christmas we were phoned by Dr W Bailey , who acquired a first floor apartment in Durham in June 2012. The dilemma was if we could estimate the premium would likely be for a 90 year extension to my lease. Identical properties in Durham with an extended lease were in the region of £285,000. The average amount of ground rent was £55 billed every twelve months. The lease expired in 2104. Taking into account 79 years unexpired we approximated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 not including professional charges.