Unfortunately that a Gateshead residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Gateshead property prices.Once your lease gets to 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under 80 years - otherwise a higher premium will be payable. Most flat owners in Gateshead will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold residencies in Gateshead with in excess of one hundred years unexpired 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 upside in buying the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you better control over the value of your Gateshead leasehold, as your property will be more valuable and marketable 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.
In the wake of eight months of unsuccessful discussions with the freeholder of her leasehold apartment in Gateshead, Millie started the lease extension process just as the lease was approaching the critical 80-year mark. The legal work completed in March 2005. The landlord’s costs were kept to an absolute minimum.
Mr A Watson was assigned a lease of a studio flat in Gateshead in August 2010. We are asked if we could shed any light on how much (roughly) price would be to extend the lease by 90 years. Identical premises in Gateshead with a long lease were in the region of £233,200. The average amount of ground rent was £60 invoiced quarterly. The lease lapsed in 2087. Taking into account 61 years remaining we calculated the premium to the landlord to extend the lease to be within £22,800 and £26,400 plus costs.
In 2010 we were called by Dr Kyle Baker who, having owned a ground floor apartment in Gateshead in July 1997. We are asked if we could estimate the compensation to the landlord would be for a 90 year lease extension. Similar properties in Gateshead with 100 year plus lease were in the region of £171,800. The mid-range amount of ground rent was £55 collected per annum. The lease end date was in 2076. Taking into account 50 years outstanding we calculated the compensation to the freeholder for the lease extension to be within £33,300 and £38,400 not including costs.