Jarrow residential property held on a long lease is a wasting asset because a leaseholder only owns the property for a set term.
Leasehold residencies in Jarrow with in excess of 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 premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| Lloyds TSB Scotland | 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 75 years plus the term of the mortgage at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in Jarrow,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Jarrow valuers.
Off the back of unsuccessful discussions with the landlord of her studio flat in Jarrow, Phoebe commenced the lease extension process as the 80 year threshold was quickly approaching. The legal work was concluded in October 2013. The landlord’s costs were kept to an absolute minimum.
Last Autumn we were called by Dr E Norbert , who was assigned a lease of a ground floor apartment in Jarrow in March 2006. The dilemma was if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Comparable homes in Jarrow with 100 year plus lease were in the region of £256,600. The average ground rent payable was £60 billed per annum. The lease came to a finish in 2078. Taking into account 52 years as a residual term we approximated the premium to the landlord to extend the lease to be between £39,000 and £45,000 exclusive of professional charges.
In 2010 we were contacted by Mr and Mrs. H King who, having owned a ground floor apartment in Jarrow in July 2006. We are asked if we could shed any light on how much (approximately) price would be for a 90 year lease extension. Comparative residencies in Jarrow with an extended lease were in the region of £218,000. The mid-range ground rent payable was £45 collected annually. The lease terminated on 4 April 2089. Having 63 years outstanding we estimated the compensation to the landlord for the lease extension to be within £17,100 and £19,800 plus legals.