The market value of Redcar leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate significantly once the unexpired lease term is less than eighty years
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with procure Redcar 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.
In the wake of 9 months of protracted correspondence with the landlord of her first floor apartment in Redcar, Rhiannon initiated the lease extension process as the 80 year mark was fast nearing. The transaction was finalised in October 2014. The freeholder’s charges were negotiated to below 500 GBP.
In 2010 we were contacted by Dr Cameron Green who, having purchased a garden flat in Redcar in May 1999. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by an additional years. Identical flats in Redcar with a long lease were worth £280,000. The mid-range amount of ground rent was £55 collected quarterly. The lease expired on 3 January 2103. Considering the 78 years remaining we estimated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 exclusive of expenses.
In 2009 we were called by Ms M Bennett who, having owned a one bedroom flat in Redcar in February 2005. We are asked if we could approximate the price could be to prolong the lease by 90 years. Comparable flats in Redcar with a long lease were valued around £186,000. The mid-range amount of ground rent was £65 collected monthly. The lease termination date was on 1 May 2083. Considering the 58 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £24,700 and £28,600 not including legals.