There is no doubt about it a leasehold flat or house in Gateshead is a wasting asset as a result of the shortening lease. If the lease has, more than 100 years to run then this decrease may be fractional that being said there will become a stage when a lease has less than eighty years left as part of the premium you will incur is what is known as a marriage value. This could increase markedly the cost. It is the primary rational as to why you should extend the lease sooner rather than later. Most flat owners in Gateshead will qualify for this right; however a conveyancing solicitor will be able to confirm whether you are eligible to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years unexpired, the residence 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with handle 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 conveyancing solicitor we work with provide it.
14 months ago Evan, started to get close to the eighty-year mark with the lease on his basement flat in Gateshead. In buying his home 19 years ago, the length of the lease was of minimal significance. As luck would have it, he became aware that he needed to take steps soon on Extending the lease. Evan was able to extend his lease at the eleventh hour last September. Evan and the landlord eventually agreed on sum of £6,000 . If the lease had slipped to less than 80 years, the amount would have escalated by at least £950.
Mrs U Mercier took over the lease of a recently refurbished apartment in Gateshead in August 2000. The dilemma was if we could approximate the price could be for a ninety year lease extension. Comparable homes in Gateshead with an extended lease were worth £223,400. The average ground rent payable was £60 collected quarterly. The lease concluded on 18 August 2084. Considering the 59 years outstanding we calculated the premium to the landlord to extend the lease to be between £27,600 and £31,800 not including fees.
In 2013 we were approached by Ms Kelsey Hernández who, having moved into a one bedroom apartment in Gateshead in June 2002. The question was if we could shed any light on how much (roughly) premium would be for a ninety year lease extension. Comparable flats in Gateshead with a long lease were worth £205,000. The average amount of ground rent was £50 invoiced annually. The lease finished on 21 November 2104. Given that there were 79 years remaining we approximated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of costs.