Unfortunately that a Tynemouth residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Tynemouth property market.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips lower than eighty years - otherwise a higher premium will be due. The majority of flat owners in Tynemouth will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the process.
It is conventional wisdom that a property with more than 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 30 years left, the property will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with handle Tynemouth 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 conveyancing solicitor we work with provide it.
Logan was the the leasehold proprietor of a high value apartment in Tynemouth on the market with a lease of fraction over sixty years left. Logan on an informal basis approached his freeholder a well known Manchester-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £100 yearly. Ordinarily, ground rent would not be payable on a lease extension were Logan to exercise his statutory right. Logan procured expert legal guidance and secured satisfactory deal informally and sell the property.
In 2014 we were called by Dr Elijah Cooper who, having completed a recently refurbished flat in Tynemouth in February 1998. The question was if we could approximate the price could be to extend the lease by ninety years. Comparable flats in Tynemouth with 100 year plus lease were worth £176,200. The average amount of ground rent was £65 billed per annum. The lease end date was in 2081. Having 56 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £29,500 and £34,000 plus legals.
Mr and Mrs. C Evans moved into a ground floor apartment in Tynemouth in August 1995. The question was if we could estimate the compensation to the landlord would be to extend the lease by a further 90 years. Comparative homes in Tynemouth with 100 year plus lease were in the region of £237,600. The average ground rent payable was £45 billed yearly. The lease expired on 8 June 2092. Having 67 years remaining we calculated the compensation to the freeholder to extend the lease to be within £11,400 and £13,200 not including costs.