With a domestic leasehold property in South Shields, you are in fact renting it for a certain amount of time. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may consider extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly especially once there are fewer than eighty years remaining. Anyone in South Shields with a lease approaching 81 years remaining should seriously think of extending it without delay. Once the lease term has below 80 years left, under the current Act the landlord can calculate and charge a larger amount, based on a technical calculation, known as “marriage value” which is due.
Leasehold premises in South Shields with more than one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges justify 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in South Shields can be a difficult process. We recommend you obtain guidance from a lawyer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring South Shields lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
During the course of the last few months Henry, came very close to the 80-year threshold with the lease on his two bedroom flat in South Shields. In buying his home twenty years ago, the length of the lease was of no relevance. As luck would have it, he noticed he needed to take steps soon on Extending the lease. Henry arranged for a lease extension at the eleventh hour last May. Henry and the landlord who owned the flat above ultimately agreed on the final figure of £5,000 . If the lease had fallen lower than 80 years, the premium would have become more costly by at least £975.
Last year we were approach by Mr Jonathan Gunderson , who completed a ground floor apartment in South Shields in September 2003. The dilemma was if we could approximate the compensation to the landlord would likely be for a 90 year extension to my lease. Comparable premises in South Shields with an extended lease were valued around £285,000. The mid-range amount of ground rent was £55 invoiced yearly. The lease finished in 2105. Considering the 80 years as a residual term we approximated the premium to the landlord to extend the lease to be between £12,400 and £14,200 not including fees.
Last Christmas we were e-mailed by Mr Toby Wilson , who bought a first floor flat in South Shields in March 2009. The dilemma was if we could approximate the compensation to the landlord would be to prolong the lease by a further 90 years. Comparable properties in South Shields with an extended lease were in the region of £200,800. The average amount of ground rent was £65 invoiced annually. The lease expiry date was in 2085. Considering the 60 years outstanding we calculated the compensation to the landlord to extend the lease to be between £20,900 and £24,200 plus legals.