Whickham leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Whickham tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Whickham you really ought to check if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
Leasehold properties in Whickham with over 100 years unexpired on the lease are often regarded as a ‘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 estate charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Coventry Building Society | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service gives you increased control over the value of your Whickham leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Joseph owned a conversion flat in Whickham on the market with a lease of a little over sixty years left. Joseph informally spoke with his landlord being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Joseph to exercise his statutory right. Joseph obtained expert legal guidance and secured satisfactory deal informally and ending up with a market value flat.
Last month we were contacted by Mr and Mrs. R Sharif , who bought a one bedroom apartment in Whickham in August 2006. The question was if we could approximate the premium would be for a 90 year lease extension. Similar premises in Whickham with 100 year plus lease were valued about £206,200. The average ground rent payable was £55 collected monthly. The lease expired in 2081. Taking into account 56 years left we approximated the premium to the landlord to extend the lease to be between £31,400 and £36,200 exclusive of legals.
Last Christmas we were approach by Mr Kyle Martinez , who took over the lease of a recently refurbished flat in Whickham in October 1995. The question was if we could shed any light on how much (roughly) price could be to extend the lease by 90 years. Comparative homes in Whickham with an extended lease were valued around £300,000. The average amount of ground rent was £50 invoiced quarterly. The lease ended in 2101. Having 76 years as a residual term we approximated the premium to the landlord for the lease extension to be between £8,600 and £9,800 plus professional charges.