Unfortunately that a Durham residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Durham property market.Where your lease has approximately 90 years left, you need to start considering a lease extension. If the number of years remaining drops below eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of flat owners in Durham will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the formalities.
Leasehold properties in Durham with in excess of 100 years remaining on the lease are often regarded as a ‘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 buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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. |
Retaining our service will provide you enhanced control over the value of your Durham leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Callum, came dangerously near to the 80-year threshold with the lease on his leasehold apartment in Durham. In buying his home 19 years ago, the length of the lease was of little bearing. Thankfully, he became aware that he needed to take steps soon on Extending the lease. Callum extended the lease at the eleventh hour in June. Callum and the landlord who owned the flat above in the end settled on a premium of £5,500 . If the lease had dipped to less than 80 years, the amount would have escalated by a minimum £925.
Last Christmas we were called by Mr and Mrs. C Mercier , who owned a basement apartment in Durham in September 2004. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Identical premises in Durham with a long lease were in the region of £173,800. The mid-range amount of ground rent was £65 collected monthly. The lease elapsed on 25 October 2080. Having 55 years remaining we approximated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 exclusive of professional charges.
Last Autumn we were called by Mr and Mrs. W White , who purchased a basement flat in Durham in August 2011. The question was if we could shed any light on how much (approximately) price could be for a ninety year lease extension. Comparative residencies in Durham with a long lease were valued about £235,200. The mid-range amount of ground rent was £45 billed monthly. The lease concluded in 2091. Considering the 66 years outstanding we calculated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 not including professional charges.