When it comes to domestic leasehold property in Durham, you are in fact renting it for a certain amount of time. In recent years flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may consider extending the lease sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly especially when there are fewer than 80 years left. Anyone in Durham with a lease drawing near to 81 years left should seriously think of extending it as soon as possible. Once a lease has under 80 years left, under the relevant legislation the freeholder is entitled to calculate and demand a greater premium, assessed on a technical multiplication, strangely termed as “marriage value” which is payable.
Leasehold residencies in Durham with more than 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
Engaging our service gives you better control over the value of your Durham leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last October William, came seriously near to the eighty-year threshold with the lease on his purpose- built apartment in Durham. Having bought his flat two decades ago, the length of the lease was of little importance. Fortunately, it dawned on him that he needed to take action soon on a lease extension. William was able to extend his lease just in the nick of time in June. William and the freeholder eventually agreed on the final figure of £6,000 . If he failed to meet the deadline, the amount would have escalated by a minimum £875.
Dr Tia Michel purchased a first floor flat in Durham in May 2008. We are asked if we could shed any light on how much (approximately) premium could be to extend the lease by ninety years. Similar residencies in Durham with 100 year plus lease were in the region of £260,000. The mid-range amount of ground rent was £50 billed annually. The lease elapsed on 6 February 2097. Having 71 years unexpired we calculated the premium to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of fees.
In 2010 we were approached by Mrs Millie Clark who, having took over the lease of a first floor apartment in Durham in November 2011. The question was if we could shed any light on how much (roughly) compensation to the landlord could be to prolong the lease by a further 90 years. Identical residencies in Durham with a long lease were worth £254,200. The average amount of ground rent was £60 collected yearly. The lease ran out on 28 May 2077. Having 51 years unexpired we estimated the compensation to the landlord for the lease extension to be between £43,700 and £50,600 not including fees.