The rule of thumb is, all other things holding equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Shotley Bridge may extend the lease for a further ninety years under legislation. Do give careful consideration before delaying your Shotley Bridge lease extension. Shelving the costs today simply increases the amount you will eventually be required to pay for a lease extension.
It is generally accepted that a property with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| Lloyds TSB Scotland | 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. |
| Yorkshire Building Society | 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. |
Retaining our service gives you enhanced control over the value of your Shotley Bridge leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Jonathan owned a high value flat in Shotley Bridge being sold with a lease of just over 61 years outstanding. Jonathan informally contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. 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 £100 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Jonathan to exercise his statutory right. Jonathan procured expert advice and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
In 2013 we were approached by Mrs Eleanor Evans who, having acquired a purpose-built flat in Shotley Bridge in June 2003. We are asked if we could shed any light on how much (approximately) premium would be to prolong the lease by 90 years. Similar flats in Shotley Bridge with a long lease were in the region of £285,000. The average amount of ground rent was £55 billed quarterly. The lease ran out in 2105. Having 80 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 not including expenses.
Mr L Wood bought a ground floor apartment in Shotley Bridge in November 2011. We are asked if we could shed any light on how much (approximately) price would likely be for a 90 year extension to my lease. Similar premises in Shotley Bridge with a long lease were worth £200,800. The average amount of ground rent was £65 billed every twelve months. The lease expiry date was in 2085. Given that there were 60 years outstanding we approximated the premium to the landlord for the lease extension to be between £20,900 and £24,200 exclusive of fees.