Ferryhill leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Ferryhill tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Ferryhill you must investigate if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the cost of any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Ferryhill with over one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and service 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. |
| Lloyds TSB Scotland | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you increased control over the value of your Ferryhill leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Felix was the the leasehold owner of a studio apartment in Ferryhill on the market with a lease of just over 59 years unexpired. Felix informally contacted his freeholder a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Felix to exercise his statutory right. Felix procured expert advice and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
Last Winter we were contacted by Mrs Jessica Bell , who purchased a basement apartment in Ferryhill in May 1997. We are asked if we could approximate the premium would likely be to extend the lease by an additional years. Identical properties in Ferryhill with 100 year plus lease were in the region of £275,000. The average ground rent payable was £45 collected quarterly. The lease end date was on 27 January 2094. Having 69 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 plus fees.
Mr and Mrs. N Green was assigned a lease of a one bedroom flat in Ferryhill in November 1999. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Similar premises in Ferryhill with 100 year plus lease were worth £216,000. The mid-range ground rent payable was £60 billed monthly. The lease concluded on 17 August 2083. Having 58 years left we calculated the premium to the landlord for the lease extension to be within £28,500 and £33,000 not including legals.