With a domestic leasehold premises in North Shields, you are actually buying an entitlement to reside in a property for a prescribed time frame. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you may think about a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly especially when there are fewer than eighty years remaining. Anyone in North Shields with a lease drawing near to 81 years unexpired should seriously think of extending it sooner as opposed to later. Once a lease has under eighty years remaining, under the current Act the freeholder can calculate and charge a larger premium, assessed on a technical calculation, strangely termed as “marriage value” which is due.
It is generally accepted that a residential leasehold with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years left, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancing solicitors that we work with handle North Shields 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 conveyancing solicitor we work with provide it.
Last Winter Thomas, started to get near to the 80-year threshold with the lease on his two bedroom flat in North Shields. Having purchased his flat 19 years ago, the unexpired term was of little significance. by good luck, he recognised he needed to take steps soon on a lease extension. Thomas was able to extend his lease just under the wire in September. Thomas and the landlord ultimately settled on the final figure of £6,000 . If the lease had slid lower than 80 years, the figure would have gone up by a minimum £900.
Mr R Garcia completed a studio flat in North Shields in November 2002. We are asked if we could shed any light on how much (approximately) premium could be to prolong the lease by ninety years. Similar homes in North Shields with a long lease were valued around £176,200. The average ground rent payable was £65 invoiced monthly. The lease expired in 2081. Taking into account 56 years left we approximated the compensation to the landlord for the lease extension to be within £29,500 and £34,000 not including fees.
Dr C Brooks bought a one bedroom flat in North Shields in March 2011. We are asked if we could approximate the compensation to the landlord could be for a 90 year lease extension. Identical homes in North Shields with 100 year plus lease were in the region of £242,600. The average ground rent payable was £45 invoiced quarterly. The lease ran out in 2092. Taking into account 67 years remaining we estimated the premium to the freeholder to extend the lease to be within £11,400 and £13,200 not including costs.