Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will normally be granted for a prescribed period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Yarm. Inevitably, the term of lease remaining reduces over time. This is often overlooked and only raises itself as an issue when the property needs to be disposed of or refinanced. The fewer the years remaining the less it is worth and the more expensive it will be to extend the lease. Eligible long lease owners in Yarm have the legal entitlement to extend the lease for an additional ninety years in accordance with legislation. Please give careful consideration before delaying your Yarm lease extension. Putting off the cost now simply increases the price you will eventually have to pay for a lease extension
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
The conveyancers that we work with undertake Yarm 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 conveyancer we work with provide it.
Hugo owned a conversion apartment in Yarm on the market with a lease of just over sixty years unexpired. Hugo informally contacted his landlord 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 to start with set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Hugo to invoke his statutory right. Hugo procured expert advice and was able to make an informed judgement and deal with the matter and sell the flat.
Dr Caitlin Rogers took over the lease of a ground floor flat in Yarm in March 1995. The question was if we could estimate the price could be to extend the lease by ninety years. Similar residencies in Yarm with an extended lease were valued about £300,000. The mid-range amount of ground rent was £50 collected monthly. The lease finished in 2101. Having 75 years remaining we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including costs.
Last November we were e-mailed by Ms I Gunderson , who moved into a one bedroom apartment in Yarm in November 2002. The question was if we could estimate the premium would likely be for a 90 year extension to my lease. Comparative properties in Yarm with 100 year plus lease were worth £250,400. The mid-range amount of ground rent was £65 invoiced annually. The lease elapsed on 26 April 2090. Having 64 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £19,000 and £22,000 exclusive of costs.