As the length of the unexpired term of a North Shields residential lease diminished so does its value and therefore the value of your property. If the lease has, in excess of 99 years remaining then this decrease may be negligible that being said there will become a point in time when a lease has fewer than 80 years unexpired as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the main logic behind why you should consider extending without delay. The majority of flat owners in North Shields will qualify for this right; however a lawyer can advise if you are eligible for a lease extension. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
Leasehold properties in North Shields 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 premises. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
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.
18 months ago Ollie, started to get close to the eighty-year threshold with the lease on his ground floor apartment in North Shields. In buying his flat 19 years previously, the unexpired term was of minimal concern. Luckily, he became aware that he needed to take action soon on a lease extension. Ollie was able to extend his lease just in the nick of time in September. Ollie and the freeholder via the management company ultimately settled on sum of £6,000 . If the lease had dropped lower than 80 years, the price would have gone up by a minimum £950.
In 2009 we were approached by Mr and Mrs. E Girard who, having bought a one bedroom flat in North Shields in September 2012. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by 90 years. Comparable flats in North Shields with an extended lease were worth £218,000. The mid-range ground rent payable was £45 billed quarterly. The lease lapsed in 2089. Given that there were 63 years remaining we estimated the compensation to the freeholder for the lease extension to be between £17,100 and £19,800 plus costs.
In 2010 we were contacted by Mr N Nguyen who, having was assigned a lease of a recently refurbished flat in North Shields in February 1997. The question was if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by 90 years. Similar premises in North Shields with 100 year plus lease were in the region of £265,000. The mid-range amount of ground rent was £55 invoiced every twelve months. The lease ran out on 6 July 2100. Given that there were 74 years unexpired we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of professional charges.