The market value of Heaton and Jesmond leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate significantly once the remaining term is less than eighty years
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Coventry Building Society | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service gives you enhanced control over the value of your Heaton and Jesmond leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last October Rory, came seriously near to the eighty-year mark with the lease on his garden apartment in Heaton and Jesmond. Having purchased his home twenty years previously, the length of the lease was of no bearing. Fortunately, he noticed he needed to take action soon on Extending the lease. Rory arranged for a lease extension at the eleventh hour last April. Rory and the freeholder via the managing agents subsequently agreed on the final figure of £5,500 . If he not met the deadline, the figure would have increased by at least £950.
Last year we were e-mailed by Dr Gabriel Morel , who acquired a recently refurbished apartment in Heaton and Jesmond in October 2007. The dilemma was if we could estimate the price could be to prolong the lease by 90 years. Comparable properties in Heaton and Jesmond with an extended lease were in the region of £184,000. The average amount of ground rent was £55 invoiced every twelve months. The lease ran out in 2078. Given that there were 53 years outstanding we calculated the compensation to the landlord to extend the lease to be between £28,500 and £33,000 exclusive of legals.
In 2011 we were contacted by Dr Oscar Kelly who, having was assigned a lease of a first floor flat in Heaton and Jesmond in January 2009. We are asked if we could approximate the price would likely be for a 90 year lease extension. Comparative properties in Heaton and Jesmond with a long lease were worth £290,000. The average amount of ground rent was £45 collected monthly. The lease ended in 2098. Taking into account 73 years outstanding we calculated the premium to the landlord to extend the lease to be between £8,600 and £9,800 not including professional charges.