Wallsend residential property owned on a long lease is a depreciating asset as the leaseholder merely owns the property for a set term.
Leasehold premises in Wallsend with in excess of one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| Halifax | 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. |
The lawyers that we work with handle Wallsend 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 lawyer we work with provide it.
Kian owned a studio flat in Wallsend being sold with a lease of fraction over fifty eight years unexpired. Kian on an informal basis contacted his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £100 annually. Ordinarily, ground rent would not be due on a lease extension were Kian to exercise his statutory right. Kian obtained expert advice and secured satisfactory resolution informally and sell the flat.
Last Christmas we were phoned by Mr H King , who owned a one bedroom apartment in Wallsend in June 2009. The dilemma was if we could shed any light on how much (roughly) price would be to extend the lease by an additional years. Similar homes in Wallsend with 100 year plus lease were worth £280,000. The mid-range ground rent payable was £45 collected every twelve months. The lease expired in 2096. Considering the 70 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 plus legals.
Mr E García was assigned a lease of a basement flat in Wallsend in March 2000. We are asked if we could shed any light on how much (approximately) price would be for a ninety year lease extension. Comparable homes in Wallsend with a long lease were in the region of £218,400. The average amount of ground rent was £60 invoiced quarterly. The lease lapsed on 24 October 2085. Given that there were 59 years outstanding we calculated the premium to the landlord to extend the lease to be between £27,600 and £31,800 plus fees.