Gateshead leases on residential properties are gradually losing 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. Legislation has been in place for sometime now allowing qualifying Gateshead residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Gateshead you really ought to see if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is generally accepted that a residential leasehold with more than one hundred years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the residence will be equivalent in value to a freehold for many years ahead.
| 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Gateshead,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Gateshead valuers.
In the wake of 9 months of lengthy discussions with the landlord of her first floor flat in Gateshead, Tia commenced the lease extension process just as the lease was approaching the crucial eighty-year deadline. The legal work completed in October 2008. The freeholder’s fees were restricted to slightly above six hundred GBP.
Mrs Abbie Rogers was assigned a lease of a garden flat in Gateshead in September 2006. The dilemma was if we could shed any light on how much (roughly) price would be for a ninety year extension to my lease. Similar residencies in Gateshead with a long lease were in the region of £300,000. The average amount of ground rent was £50 invoiced yearly. The lease lapsed on 25 August 2100. Given that there were 75 years left we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 not including expenses.
In 2009 we were phoned by Mr W Miller who, having moved into a purpose-built apartment in Gateshead in March 2005. We are asked if we could approximate the premium could be for a ninety year lease extension. Similar flats in Gateshead with 100 year plus lease were in the region of £250,400. The mid-range amount of ground rent was £65 billed per annum. The lease ran out on 6 March 2089. Having 64 years outstanding we estimated the compensation to the landlord to extend the lease to be within £19,000 and £22,000 plus costs.