The rule of thumb is, all other things holding equal, the shorter the lease the more costly the premium. Qualifying leaseholders in Jarrow can extend the lease for a further 90 years in accordance with legislation. Please think carefully before delaying your Jarrow lease extension. Putting off the costs now simply escalates the premium you will ultimately be required to pay to extend the lease.
Leasehold residencies in Jarrow with over one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant 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. |
| Bank of Scotland | 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. |
| 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. |
| Yorkshire 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. |
Retaining our service gives you increased control over the value of your Jarrow leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Spring Adam, came very close to the eighty-year threshold with the lease on his studio apartment in Jarrow. In buying his property two decades ago, the lease term was of little relevance. by good luck, he became aware that he would imminently be paying an escalated premium for Extending the lease. Adam was able to extend his lease just ahead of time last March. Adam and the freeholder ultimately agreed on an amount of £5,500 . If he not met the deadline, the sum would have escalated by at least £1,075.
Last Christmas we were phoned by Dr N Howard , who was assigned a lease of a one bedroom flat in Jarrow in May 1998. The dilemma was if we could shed any light on how much (roughly) price would likely be for a 90 year lease extension. Similar properties in Jarrow with an extended lease were valued about £225,400. The mid-range amount of ground rent was £45 invoiced every twelve months. The lease lapsed in 2089. Given that there were 64 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £16,200 and £18,600 exclusive of fees.
In 2011 we were approached by Mrs Erin James who, having took over the lease of a purpose-built flat in Jarrow in November 2004. We are asked if we could shed any light on how much (roughly) premium could be to extend the lease by an additional years. Similar residencies in Jarrow with an extended lease were valued around £270,000. The average ground rent payable was £55 collected every twelve months. The lease termination date was on 17 September 2100. Taking into account 75 years remaining we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 plus legals.