With a domestic leasehold premises in Northallerton, you are in fact renting it for a certain amount of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly especially once there are less than eighty years left. Leasehold owners in Northallerton with a lease approaching 81 years remaining should seriously think of extending it as soon as possible. When the lease term has under eighty years left, under the current legislation the freeholder can calculate and levy a larger amount, assessed on a technical multiplication, known as “marriage value” which is due.
Leasehold residencies in Northallerton with over one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Northallerton,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Northallerton valuers.
Aarav owned a 2 bedroom flat in Northallerton on the market with a lease of just over sixty years outstanding. Aarav on an informal basis approached his freeholder being a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Aarav to exercise his statutory right. Aarav obtained expert advice and was able to make a more informed decision and deal with the matter and readily saleable.
Last Christmas we were called by Mr and Mrs. N Alexander , who acquired a studio flat in Northallerton in November 2008. We are asked if we could approximate the price could be to prolong the lease by a further 90 years. Comparable premises in Northallerton with 100 year plus lease were worth £275,000. The average amount of ground rent was £65 collected annually. The lease ended in 2093. Given that there were 68 years remaining we calculated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 not including expenses.
Last Summer we were phoned by Mr and Mrs. L Johnson , who purchased a first floor flat in Northallerton in August 2007. The dilemma was if we could shed any light on how much (approximately) premium could be for a ninety year lease extension. Similar flats in Northallerton with 100 year plus lease were in the region of £208,600. The average ground rent payable was £60 billed per annum. The lease expiry date was in 2082. Considering the 57 years outstanding we approximated the premium to the landlord to extend the lease to be between £30,400 and £35,200 plus fees.