Durham leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Durham tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Durham you must see if your lease has between seventy and ninety years remaining. There are good reasons why a Durham flat owner with a lease having around 80 years left should take action to make sure that a lease extension is effected without delay
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety 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 |
|---|---|
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Durham can be a difficult process. We recommend you get guidance from a conveyancer and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Durham lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In the wake of eight months of protracted negotiations with the landlord of her leasehold flat in Durham, Molly commenced the lease extension process as the eighty year threshold was fast advancing. The transaction completed in October 2007. The freeholder’s charges were kept to an absolute minimum.
Dr Archie David was assigned a lease of a basement flat in Durham in March 2006. The question was if we could approximate the compensation to the landlord could be to extend the lease by 90 years. Comparable premises in Durham with a long lease were worth £183,600. The average ground rent payable was £65 collected monthly. The lease termination date was in 2082. Taking into account 57 years left we approximated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 not including expenses.
In 2009 we were contacted by Dr I Anderson who, having completed a one bedroom apartment in Durham in May 2003. The question was if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Identical residencies in Durham with an extended lease were valued around £250,000. The mid-range ground rent payable was £50 billed annually. The lease ran out on 12 July 2093. Having 68 years as a residual term we calculated the premium to the landlord to extend the lease to be between £10,500 and £12,000 not including legals.