When it comes to domestic leasehold premises in Jarrow, you are actually buying a right to live in a property for a set period of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may think about extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly notably once there are fewer than eighty years remaining. Anyone in Jarrow with a lease nearing 81 years remaining should seriously think of extending it without delay. Once a lease has below eighty years left, under the current statute the freeholder is entitled to calculate and charge a larger premium, assessed on a technical calculation, strangely termed as “marriage value” which is due.
It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
The conveyancing solicitors that we work with handle Jarrow lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Last year Charlie, came precariously close to the eighty-year threshold with the lease on his purpose- built flat in Jarrow. Having bought his home 19 years ago, the unexpired term was of no concern. Thankfully, he noticed he would imminently be paying way over the odds for Extending the lease. Charlie arranged for a lease extension just under the wire last July. Charlie and the freeholder via the management company in the end settled on sum of £5,000 . If the lease had slipped below eighty years, the premium would have escalated by at least £1,050.
In 2013 we were approached by Dr T Anderson who, having acquired a ground floor flat in Jarrow in August 2008. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year extension to my lease. Similar residencies in Jarrow with an extended lease were worth £255,000. The average ground rent payable was £50 billed annually. The lease finished in 2097. Given that there were 71 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 plus fees.
In 2012 we were contacted by Mr V Bertrand who, having owned a studio flat in Jarrow in March 2008. We are asked if we could approximate the price could be to extend the lease by ninety years. Comparative properties in Jarrow with 100 year plus lease were in the region of £254,200. The average amount of ground rent was £60 billed annually. The lease end date was in 2077. Given that there were 51 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £43,700 and £50,600 plus expenses.