Unfortunately that a North Shields and Tynemouth residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the North Shields and Tynemouth property prices.Where your lease has approximately ninety years left, you should start thinking about a lease extension. If lease term falls under eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of flat owners in North Shields and Tynemouth will be able to extend under the legislation; however a conveyancer will be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer throughout the formalities.
Leasehold premises in North Shields and Tynemouth with in excess of one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and estate 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
The conveyancers that we work with procure North Shields and Tynemouth lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Joshua owned a 2 bedroom flat in North Shields and Tynemouth on the market with a lease of fraction over sixty years left. Joshua informally approached his freeholder being a well known London-based freehold company for a lease extension. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £100 per annum. No ground rent would be payable on a lease extension were Joshua to invoke his statutory right. Joshua obtained expert advice and was able to make a more informed judgement and deal with the matter and sell the property.
Last Christmas we were phoned by Dr V Garcia , who owned a ground floor apartment in North Shields and Tynemouth in July 2000. The question was if we could estimate the compensation to the landlord would likely be to prolong the lease by 90 years. Identical flats in North Shields and Tynemouth with 100 year plus lease were worth £260,200. The mid-range amount of ground rent was £65 billed every twelve months. The lease came to a finish on 24 October 2092. Considering the 66 years outstanding we calculated the compensation to the landlord for the lease extension to be within £15,200 and £17,600 exclusive of costs.
Last Spring we were called by Ms H Richardson , who owned a first floor flat in North Shields and Tynemouth in March 2009. The question was if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Similar residencies in North Shields and Tynemouth with 100 year plus lease were in the region of £198,800. The mid-range ground rent payable was £55 collected monthly. The lease expired on 26 April 2081. Taking into account 55 years unexpired we approximated the premium to the freeholder for the lease extension to be between £33,300 and £38,400 not including costs.