The nearer a residential lease in Durham nears to zero years unexpired, the more it reduces the value of the property. Where the lease has, more than 100 years remaining then this decrease may be fractional nevertheless there will become a stage when a lease has under than eighty years remaining as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary rational as to why you should extend the lease sooner rather than later. Many flat owners in Durham will qualify for this right; that being said a lawyer should be able to advise if you are eligible to extend your lease. In certain situations you may not qualify, the most common reason being that you have owned the property for under two years.
Leasehold residencies in Durham with more than 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges justify 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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 |
| 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 relation to the lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Ryan, came very near to the eighty-year mark with the lease on his two bedroom apartment in Durham. Having purchased his property two decades ago, the lease term was of little interest. Luckily, he noticed he needed to take steps soon on Extending the lease. Ryan arranged for a lease extension at the eleventh hour in March. Ryan and the freeholder via the management company subsequently agreed on the final figure of £5,500 . If he failed to meet the deadline, the sum would have become more exhorbitant by at least £950.
In 2014 we were approached by Mr Rory Bernard who, having was assigned a lease of a one bedroom apartment in Durham in February 1996. The question was if we could estimate the price would be to extend the lease by ninety years. Similar premises in Durham with an extended lease were worth £280,000. The mid-range amount of ground rent was £55 collected annually. The lease end date was in 2103. Considering the 77 years unexpired we calculated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 not including professional charges.
Last Spring we were e-mailed by Dr Anna Miller , who acquired a basement flat in Durham in April 2009. The dilemma was if we could approximate the premium would likely be for a 90 year lease extension. Similar properties in Durham with a long lease were valued about £183,600. The mid-range ground rent payable was £65 billed quarterly. The lease finished on 22 August 2083. Having 57 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £28,500 and £33,000 plus costs.