Middlesbrough leases on domestic properties are gradually losing value. Where your lease has in the region of 90 years unexpired, you should start thinking about a lease extension. If lease term dips under eighty years, you will then have to pay half of the property's 'marriage value' in addition to the standard cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Leasehold owners in Middlesbrough will mostly be legally entitled to a lease extension; however a solicitor will confirm your eligibility. In some cases you may not be entitled. There are prescribed deadlines and procedures to comply with once the process is initiated so it’s best to be guided by a conveyancing solicitor during the process.
Leasehold residencies in Middlesbrough with more than one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold 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. |
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Engaging our service gives you better control over the value of your Middlesbrough leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Lewis, came very close to the eighty-year threshold with the lease on his first floor flat in Middlesbrough. In buying his property two decades ago, the length of the lease was of minimal interest. by good luck, it dawned on him that he would soon be paying way over the odds for Extending the lease. Lewis arranged for a lease extension just under the wire last May. Lewis and the landlord who owned the flat above subsequently agreed on a premium of £5,500 . If the lease had slid below 80 years, the price would have escalated by at least £1,125.
Last year we were e-mailed by Mr and Mrs. L Wright , who owned a one bedroom apartment in Middlesbrough in January 2011. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparable flats in Middlesbrough with 100 year plus lease were worth £208,600. The mid-range amount of ground rent was £60 collected annually. The lease expired on 4 May 2082. Given that there were 57 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £30,400 and £35,200 plus fees.
In 2011 we were e-mailed by Mr Sam Evans who, having moved into a ground floor flat in Middlesbrough in November 1999. The dilemma was if we could approximate the compensation to the landlord would likely be to extend the lease by an additional years. Similar homes in Middlesbrough with an extended lease were in the region of £200,000. The average amount of ground rent was £50 invoiced per annum. The lease lapsed in 2102. Taking into account 77 years remaining we approximated the premium to the landlord to extend the lease to be between £8,600 and £9,800 plus legals.