With a domestic leasehold property in East Boldon, you are actually purchasing a right to reside in a property for a set period of time. In recent years flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you may think about a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly particularly when there are less than 80 years left. Anyone in East Boldon with a lease approaching 81 years unexpired should seriously think of extending it without delay. Once the lease term has less than eighty years outstanding, under the relevant legislation the landlord is entitled to calculate and demand a larger premium, assessed on a technical multiplication, known as “marriage value” which is due.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further 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 |
|---|---|
| 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. |
| Bank of Scotland | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
The lawyers that we work with undertake East Boldon 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.
Aarav owned a conversion apartment in East Boldon being marketed with a lease of just over 72 years left. Aarav on an informal basis approached his freeholder a well known Bristol-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £50 annually. No ground rent would be due on a lease extension were Aarav to exercise his statutory right. Aarav procured expert advice and secured an acceptable deal informally and sell the property.
Mr and Mrs. D Cook completed a one bedroom flat in East Boldon in May 2010. We are asked if we could estimate the price would likely be to prolong the lease by ninety years. Comparative residencies in East Boldon with a long lease were worth £265,000. The mid-range amount of ground rent was £50 invoiced quarterly. The lease terminated on 27 September 2098. Having 73 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 not including fees.
Last Spring we were contacted by Mr and Mrs. R Reed , who purchased a garden apartment in East Boldon in June 2012. The dilemma was if we could estimate the compensation to the landlord would be to extend the lease by an additional years. Similar premises in East Boldon with 100 year plus lease were worth £264,000. The mid-range amount of ground rent was £60 invoiced per annum. The lease terminated in 2078. Having 53 years remaining we calculated the compensation to the landlord for the lease extension to be between £37,100 and £42,800 exclusive of costs.