Yarm leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. It is the case that most Yarm 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 Yarm you should investigate if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service will provide you better control over the value of your Yarm leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Samuel owned a 2 bedroom flat in Yarm being sold with a lease of a few days over 59 years remaining. Samuel on an informal basis contacted his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Samuel to invoke his statutory right. Samuel procured expert legal guidance and secured satisfactory resolution informally and sell the property.
Mr and Mrs. O Bernard was assigned a lease of a basement flat in Yarm in March 2000. The dilemma was if we could approximate the premium would likely be for a ninety year lease extension. Comparable properties in Yarm with an extended lease were valued around £233,200. The mid-range amount of ground rent was £60 invoiced quarterly. The lease ended in 2087. Given that there were 61 years left we approximated the premium to the landlord to extend the lease to be between £22,800 and £26,400 exclusive of costs.
In 2009 we were called by Mr N Davis who, having was assigned a lease of a studio apartment in Yarm in February 2012. The dilemma was if we could shed any light on how much (roughly) price would be for a ninety year extension to my lease. Comparable residencies in Yarm with 100 year plus lease were in the region of £171,800. The average ground rent payable was £55 invoiced every twelve months. The lease ran out in 2076. Taking into account 50 years unexpired we calculated the premium to the landlord for the lease extension to be within £33,300 and £38,400 plus costs.