The market value of a leasehold property in Jesmond depends on how many years the lease has remaining. If it is near to or less than 80 years you should anticipate problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. Ideally one should start the lease extension process when the lease still has 82 years unexpired so that a lease extension can be concluded prior to the 80 year cut off point. Statute enables Jesmond qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus a supplemental term of ninety years. The purpose of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the premises will be worth the same as a freehold for decades to come.
| 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Regardless of whether you are a tenant or a freeholder in Jesmond,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Jesmond valuers.
In recent months Sebastian, started to get near to the eighty-year mark with the lease on his one bedroom apartment in Jesmond. In buying his flat 19 years ago, the length of the lease was of little significance. by good luck, he recognised he would soon be paying an escalated premium for a lease extension. Sebastian was able to extend his lease at the eleventh hour in June. Sebastian and the landlord who owned the flat above subsequently agreed on sum of £5,000 . If he had missed the deadline, the figure would have increased by at least £850.
Last Summer we were phoned by Mr Noah Anderson , who took over the lease of a one bedroom apartment in Jesmond in February 2002. We are asked if we could estimate the premium would likely be to prolong the lease by ninety years. Comparative homes in Jesmond with 100 year plus lease were in the region of £275,000. The mid-range ground rent payable was £65 invoiced quarterly. The lease concluded on 14 March 2094. Having 68 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 not including legals.
In 2014 we were called by Mr and Mrs. C Gunderson who, having completed a basement apartment in Jesmond in September 2000. The question was if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year extension to my lease. Identical flats in Jesmond with 100 year plus lease were worth £208,600. The mid-range ground rent payable was £60 collected every twelve months. The lease concluded in 2083. Having 57 years unexpired we estimated the premium to the freeholder to extend the lease to be within £30,400 and £35,200 plus fees.