The market value of Jarrow leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can increase materialy once the remaining term is less than 80 years
Leasehold premises in Jarrow with more than one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| 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. |
| 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 be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a freeholder in Jarrow,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Jarrow valuers.
During the course of the last few months Lewis, started to get close to the eighty-year mark with the lease on his garden flat in Jarrow. Having bought his flat two decades ago, the unexpired term was of little relevance. Luckily, he recognised he would imminently be paying way over the odds for a lease extension. Lewis arranged for a lease extension just under the wire in April. Lewis and the freeholder in the end agreed on the final figure of £5,000 . If he not met the deadline, the amount would have escalated by at least £1,000.
Last June we were contacted by Mr Omar Baker , who bought a recently refurbished flat in Jarrow in January 2007. We are asked if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Identical premises in Jarrow with an extended lease were worth £193,400. The mid-range ground rent payable was £65 billed annually. The lease concluded in 2085. Having 59 years unexpired we estimated the premium to the landlord for the lease extension to be within £21,900 and £25,200 not including costs.
In 2012 we were e-mailed by Mrs Ellen Mercier who, having completed a basement apartment in Jarrow in February 2010. We are asked if we could shed any light on how much (approximately) price could be to extend the lease by 90 years. Similar homes in Jarrow with a long lease were in the region of £255,000. The average ground rent payable was £50 collected monthly. The lease termination date was in 2096. Taking into account 70 years outstanding we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including legals.