There is no doubt about it a leasehold property in Bishop Auckland is a wasting asset as a result of the shortening lease. Where the residual term has, beyond one hundred years to run then this decrease may be fractional however there will become a point in time when a lease has less than 80 years left as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the primary rational as to why you should extend the lease sooner than later. The majority of flat owners in Bishop Auckland will qualify for this right; however a lawyer should be able to confirm whether you are eligible to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
It is generally considered that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years left, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake Bishop Auckland 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 lawyer we work with provide it.
Two years ago Seth, started to get close to the eighty-year mark with the lease on his one bedroom apartment in Bishop Auckland. Having purchased his flat two decades ago, the lease term was of minimal importance. Fortunately, he recognised he would soon be paying an escalated premium for a lease extension. Seth was able to extend his lease just under the wire last January. Seth and the freeholder eventually settled on sum of £5,000 . If the lease had gone to less than eighty years, the amount would have escalated by at least £1,150.
Last Autumn we were called by Mrs Kirsty Sánchez , who owned a studio apartment in Bishop Auckland in August 2005. We are asked if we could estimate the price could be to extend the lease by 90 years. Comparable homes in Bishop Auckland with an extended lease were valued about £181,600. The mid-range amount of ground rent was £55 collected monthly. The lease came to a finish in 2077. Given that there were 52 years remaining we estimated the compensation to the landlord for the lease extension to be between £30,400 and £35,200 exclusive of legals.
Last Summer we were phoned by Mr and Mrs. G Robinson , who acquired a one bedroom flat in Bishop Auckland in March 1996. We are asked if we could approximate the compensation to the landlord could be for a ninety year lease extension. Identical homes in Bishop Auckland with an extended lease were valued around £285,000. The mid-range amount of ground rent was £45 collected yearly. The lease expired on 1 February 2097. Taking into account 72 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 exclusive of costs.