Unfortunately that a Gosforth residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Gosforth property prices.Once your lease gets to 85ish years, you need to 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 below 80 years - otherwise a higher amount will be payable. Most flat owners in Gosforth will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer for the duration of the process.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| 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. |
| 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 |
| Royal Bank of Scotland | 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. |
Using our service will provide you enhanced control over the value of your Gosforth leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
After protracted negotiations with the landlord of her garden apartment in Gosforth, Madeleine started the lease extension process as the 80 year deadline was rapidly nearing. The legal work completed in September 2012. The freeholder’s costs were kept to an absolute minimum.
In 2009 we were e-mailed by Dr Logan Parker who, having completed a garden flat in Gosforth in March 2003. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by 90 years. Similar premises in Gosforth with a long lease were in the region of £280,000. The average amount of ground rent was £45 collected monthly. The lease came to a finish in 2096. Considering the 70 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 not including legals.
Last Autumn we were phoned by Mrs Grace Rivera , who acquired a ground floor flat in Gosforth in October 1998. The question was if we could shed any light on how much (approximately) premium would likely be to extend the lease by a further 90 years. Comparative residencies in Gosforth with an extended lease were worth £218,400. The average ground rent payable was £60 invoiced per annum. The lease ran out on 21 October 2085. Having 59 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £27,600 and £31,800 exclusive of expenses.