The market value of Durham leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate materialy once the remaining term is less than 80 years
Leasehold premises in Durham with over 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Durham can be a difficult process. We recommend you procure professional help from a conveyancing solicitor 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 in-depth market knowledge dealing with 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 6 months of protracted discussions with the freeholder of her first floor flat in Durham, Niamh commenced the lease extension process as the eighty year mark was rapidly advancing. The legal work completed in May 2008. The landlord’s charges were kept to an absolute minimum.
Last Winter we were phoned by Mr and Mrs. U Sharif , who acquired a one bedroom apartment in Durham in February 1998. The question was if we could shed any light on how much (approximately) premium would be to extend the lease by 90 years. Identical flats in Durham with 100 year plus lease were worth £270,000. The average ground rent payable was £55 collected annually. The lease terminated in 2101. Taking into account 75 years as a residual term we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including costs.
In 2014 we were contacted by Mr W Lee who, having owned a basement apartment in Durham in August 1998. The dilemma was if we could shed any light on how much (roughly) premium would likely be to prolong the lease by a further 90 years. Comparable residencies in Durham with 100 year plus lease were valued around £173,800. The mid-range amount of ground rent was £60 billed every twelve months. The lease lapsed on 16 July 2081. Taking into account 55 years unexpired we calculated the premium to the freeholder to extend the lease to be between £31,400 and £36,200 not including fees.