When it comes to residential leasehold premises in Yarm, you effectively rent it for a certain amount of time. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may think about a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly especially once there are less than eighty years left. Leasehold owners in Yarm with a lease approaching 81 years remaining should seriously consider extending it without delay. When a lease has fewer than 80 years left, under the relevant legislation the landlord is entitled to calculate and demand a larger amount, based on a technical computation, known as “marriage value” which is due.
Leasehold premises in Yarm with over 100 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 property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 |
Irrespective of whether you are a tenant or a landlord in Yarm,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Yarm valuers.
Joshua was the the leasehold owner of a 2 bedroom flat in Yarm being sold with a lease of a few days over 72 years remaining. Joshua informally spoke with his landlord a well known Manchester-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 to start with set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Joshua to exercise his statutory right. Joshua procured expert legal guidance and secured satisfactory resolution informally and sell the property.
In 2013 we were called by Mr Theo Hill who, having owned a one bedroom flat in Yarm in July 2001. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by 90 years. Identical premises in Yarm with 100 year plus lease were in the region of £225,800. The average amount of ground rent was £60 collected yearly. The lease end date was on 20 February 2086. Having 60 years outstanding we approximated the premium to the landlord for the lease extension to be within £24,700 and £28,600 plus legals.
In 2013 we were contacted by Mr and Mrs. J Mason who, having moved into a first floor apartment in Yarm in February 2006. The question was if we could estimate the price could be for a ninety year lease extension. Similar flats in Yarm with a long lease were valued about £210,000. The average amount of ground rent was £50 billed annually. The lease elapsed on 14 October 2106. Considering the 80 years outstanding we estimated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 not including expenses.