The market value of Gateshead leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate significantly once the remaining term is less than 80 years
Leasehold residencies in Gateshead with over one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
| Yorkshire 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. |
The conveyancing solicitors that we work with procure Gateshead 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.
Finley owned a high value flat in Gateshead on the market with a lease of a few days over fifty eight years unexpired. Finley on an informal basis approached his freeholder being a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Finley to invoke his statutory right. Finley obtained expert advice and was able to make an informed decision and deal with the matter and ending up with a market value flat.
Last month we were called by Mr and Mrs. A Jones , who completed a garden flat in Gateshead in November 2001. We are asked if we could shed any light on how much (roughly) premium could be to prolong the lease by ninety years. Identical homes in Gateshead with a long lease were in the region of £210,000. The average amount of ground rent was £50 collected monthly. The lease came to a finish on 19 March 2106. Taking into account 80 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 plus legals.
Last May we were e-mailed by Mr and Mrs. T David , who acquired a studio flat in Gateshead in June 1999. The dilemma was if we could shed any light on how much (roughly) premium would be for a ninety year extension to my lease. Similar residencies in Gateshead with an extended lease were valued around £280,000. The average ground rent payable was £45 collected per annum. The lease ended in 2095. Taking into account 69 years left we estimated the premium to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of professional charges.