Gosforth leases on residential properties are gradually diminishing in 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. It is the case that most Gosforth tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Gosforth you really ought to see if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold premises in Gosforth with in excess of one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Gosforth,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Gosforth valuers.
Last October Jason, came very near to the 80-year mark with the lease on his ground floor apartment in Gosforth. Having purchased his flat 18 years ago, the lease term was of no relevance. Thankfully, he realised he needed to take action soon on a lease extension. Jason extended the lease just in the nick of time last June. Jason and the landlord who owned the flat above ultimately settled on the final figure of £5,500 . If he not met the deadline, the price would have escalated by at least £1,100.
Ms Y Davis took over the lease of a first floor flat in Gosforth in February 2006. The question was if we could approximate the compensation to the landlord would be for a ninety year lease extension. Comparable residencies in Gosforth with a long lease were in the region of £200,000. The mid-range amount of ground rent was £50 invoiced every twelve months. The lease finished on 27 August 2102. Considering the 77 years as a residual term we approximated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 not including costs.
In 2013 we were called by Ms N Rivera who, having acquired a first floor apartment in Gosforth in October 2002. The dilemma was if we could approximate the compensation to the landlord would be for a 90 year lease extension. Comparable properties in Gosforth with a long lease were worth £260,200. The mid-range amount of ground rent was £65 billed per annum. The lease lapsed in 2091. Having 66 years as a residual term we approximated the compensation to the freeholder to extend the lease to be between £16,200 and £18,600 plus costs.