Chances are that if you own a flat in Durham you actually own a long leasehold interest over your property
It is generally considered that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 years left, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Using our service gives you enhanced control over the value of your Durham leasehold, as your property will be more valuable and marketable in respect of lease length should you want 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.
Jake was the the leasehold owner of a high value flat in Durham on the market with a lease of a few days over fifty eight years remaining. Jake on an informal basis approached his freeholder a well known London-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 on the basis of a new rent at the outset set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Jake to exercise his statutory right. Jake procured expert legal guidance and was able to make a more informed judgement and deal with the matter and sell the flat.
Mr and Mrs. W Evans took over the lease of a basement apartment in Durham in October 2006. We are asked if we could estimate the price could be for a ninety year extension to my lease. Similar premises in Durham with 100 year plus lease were valued about £232,800. The average amount of ground rent was £45 billed yearly. The lease ended on 24 June 2090. Given that there were 65 years unexpired we calculated the premium to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of fees.
Last Summer we were called by Mr I Mercier , who completed a purpose-built apartment in Durham in April 1995. The dilemma was if we could approximate the price would likely be to extend the lease by a further 90 years. Identical premises in Durham with a long lease were valued about £275,000. The average amount of ground rent was £55 billed per annum. The lease terminated in 2101. Taking into account 76 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 not including expenses.