When it comes to residential leasehold premises in Shiremoor, you effectively rent it for a certain amount of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you should think about a lease extension sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease becomes disproportionately greater especially when there are less than eighty years remaining. Anyone in Shiremoor with a lease nearing 81 years left should seriously think of extending it sooner than later. When the lease term has under 80 years left, under the current legislation the freeholder is entitled to calculate and levy a larger premium, assessed on a technical computation, strangely termed as “marriage value” which is payable.
It is generally accepted that a residential leasehold with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| 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. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a landlord in Shiremoor,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Shiremoor valuers.
Last October Felix, came precariously close to the eighty-year threshold with the lease on his leasehold flat in Shiremoor. In buying his flat 19 years previously, the length of the lease was of minimal relevance. Luckily, he became aware that he needed to take action soon on Extending the lease. Felix was able to extend his lease at the eleventh hour in April. Felix and the freeholder via the managing agents ultimately agreed on sum of £6,000 . If he not met the deadline, the price would have gone up by at least £1,075.
Last Winter we were phoned by Mr and Mrs. F Díaz , who took over the lease of a first floor apartment in Shiremoor in September 2004. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Comparative homes in Shiremoor with a long lease were in the region of £206,200. The mid-range amount of ground rent was £60 invoiced every twelve months. The lease terminated in 2082. Having 56 years as a residual term we estimated the premium to the landlord to extend the lease to be within £31,400 and £36,200 not including costs.
Last Winter we were contacted by Dr Aaron Rivera , who took over the lease of a ground floor apartment in Shiremoor in June 2001. The dilemma was if we could approximate the compensation to the landlord could be to extend the lease by an additional years. Identical premises in Shiremoor with a long lease were in the region of £300,000. The mid-range amount of ground rent was £50 billed every twelve months. The lease ran out on 10 October 2102. Given that there were 76 years outstanding we calculated the premium to the landlord for the lease extension to be between £8,600 and £9,800 not including fees.