For those whose Newcastle upon Tyne property is held on a long lease, the message is clear – if nothing is done, the property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more expensive it will be to extend the lease.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Irrespective of whether you are a tenant or a freeholder in Newcastle upon Tyne,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Newcastle upon Tyne valuers.
14 months ago Eli, started to get near to the 80-year mark with the lease on his first floor flat in Newcastle upon Tyne. In buying his flat 19 years previously, the unexpired term was of no bearing. Thankfully, it dawned on him that he would soon be paying an inflated amount for a lease extension. Eli was able to extend his lease just under the wire in March. Eli and the freeholder eventually agreed on an amount of £5,500 . If the lease had slipped lower than eighty years, the price would have escalated by a minimum £850.
Dr Catherine Morgan completed a garden apartment in Newcastle upon Tyne in July 1999. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by ninety years. Comparative homes in Newcastle upon Tyne with a long lease were valued around £225,400. The average ground rent payable was £45 invoiced monthly. The lease elapsed in 2089. Having 64 years outstanding we estimated the premium to the landlord for the lease extension to be between £16,200 and £18,600 exclusive of costs.
Last Christmas we were called by Mr and Mrs. R Scott , who was assigned a lease of a recently refurbished apartment in Newcastle upon Tyne in May 2003. We are asked if we could shed any light on how much (roughly) price would likely be to prolong the lease by ninety years. Comparable premises in Newcastle upon Tyne with a long lease were worth £270,000. The average amount of ground rent was £55 invoiced monthly. The lease finished on 4 January 2100. Having 75 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 plus costs.