Yarm leases on residential deteriorating in value. Where your lease has about 90 years unexpired, you should start thinking about a lease extension. It is important to recognise that it is that it is desirable for the lease extension to be in place before the term of the current lease drops below 80 years - otherwise a higher amount will be payable. Flat owners in Yarm will usually qualify for a lease extension; however a solicitor will check your eligibility. In some circumstances you may not qualify. There are prescribed deadlines and formalities to comply with once the process is initiated so it’s prudent to be guided by a lawyer during the process.
Leasehold residencies in Yarm with in excess of 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
Regardless of whether you are a tenant or a freeholder in Yarm,the lease extension experts 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.
Finn owned a studio flat in Yarm on the market with a lease of a little over sixty years outstanding. Finn on an informal basis spoke with his landlord a well known Bristol-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £100 annually. Ordinarily, ground rent would not be due on a lease extension were Finn to exercise his statutory right. Finn obtained expert advice and secured satisfactory resolution without resorting to tribunal and readily saleable.
In 2009 we were contacted by Mr and Mrs. L González who, having owned a one bedroom flat in Yarm in May 1996. We are asked if we could estimate the price could be for a ninety year lease extension. Similar flats in Yarm with an extended lease were valued about £250,400. The mid-range amount of ground rent was £65 invoiced per annum. The lease ran out in 2090. Taking into account 64 years as a residual term we calculated the compensation to the landlord to extend the lease to be within £19,000 and £22,000 exclusive of expenses.
In 2012 we were approached by Mr Caleb Miller who, having purchased a ground floor apartment in Yarm in May 2011. The dilemma was if we could estimate the premium would likely be for a 90 year extension to my lease. Comparable homes in Yarm with a long lease were in the region of £189,000. The mid-range amount of ground rent was £55 invoiced monthly. The lease expiry date was on 1 September 2079. Considering the 53 years remaining we estimated the compensation to the freeholder to extend the lease to be within £28,500 and £33,000 exclusive of professional charges.