It’s an underpublicised certainty that a Tynemouth residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Tynemouth property market.Once your lease nears 85ish years, you should start thinking about a lease extension. If lease term slips below eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of leasehold 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 timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 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 |
|---|---|
| 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; |
| 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. |
| 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. |
Lease extensions in Tynemouth can be a difficult process. We recommend you secure professional help from a conveyancer and surveyor with experience in lease extensions.
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 in-depth market knowledge procuring Tynemouth lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Muhammad owned a high value flat in Tynemouth on the market with a lease of a few days over 61 years unexpired. Muhammad informally approached his landlord being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend 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 Muhammad to invoke his statutory right. Muhammad procured expert advice and secured an acceptable resolution informally and ending up with a market value flat.
Last year we were contacted by Mr Jason Dupont , who purchased a first floor apartment in Tynemouth in August 2000. We are asked if we could approximate the premium would be for a 90 year lease extension. Comparative flats in Tynemouth with 100 year plus lease were in the region of £186,000. The average ground rent payable was £65 collected per annum. The lease concluded on 11 October 2084. Considering the 58 years unexpired we approximated the premium to the freeholder for the lease extension to be between £24,700 and £28,600 plus legals.
Dr I Flores owned a newly refurbished apartment in Tynemouth in August 2005. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Similar premises in Tynemouth with 100 year plus lease were valued around £250,000. The average ground rent payable was £50 collected every twelve months. The lease termination date was in 2095. Taking into account 69 years left we calculated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 not including costs.