There is no doubt about it a leasehold flat or house in Redcar is a wasting asset as a result of the shortening lease. Where the residual term has, beyond one hundred years remaining then this decrease may be of little impact nevertheless there will become a point in time when a lease has less than 80 years unexpired as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main rational as to why you should extend the lease without delay. Many flat owners in Redcar will qualify for this right; however a lawyer will be able to confirm whether you are eligible for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
Leasehold properties in Redcar with over one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate 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. |
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service will provide you increased control over the value of your Redcar leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 6 months of lengthy correspondence with the landlord of her ground floor apartment in Redcar, Lily initiated the lease extension process just as her lease was approaching the all-important eighty-year deadline. The lease extension completed in July 2013. The landlord’s charges were kept to an absolute minimum.
In 2009 we were called by Mr and Mrs. F Smith who, having was assigned a lease of a first floor flat in Redcar in August 2010. The question was if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by 90 years. Identical residencies in Redcar with 100 year plus lease were in the region of £203,200. The average amount of ground rent was £65 collected annually. The lease end date was in 2087. Taking into account 61 years unexpired we calculated the compensation to the landlord to extend the lease to be within £20,000 and £23,000 exclusive of expenses.
Mr and Mrs. W Lee acquired a newly refurbished flat in Redcar in January 1995. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by ninety years. Similar premises in Redcar with an extended lease were valued about £260,000. The mid-range ground rent payable was £50 collected quarterly. The lease terminated on 26 March 2098. Considering the 72 years unexpired we calculated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus costs.