The nearer a domestic lease in Yarm gets to zero years unexpired, the more it reduces the value of the property. Where the lease has, over 125 years to run then this decrease may be fractional nevertheless there will become a point in time when a lease has fewer 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 main rational as to why you should extend the lease without delay. Most flat owners in Yarm will meet the qualifying criteria; nevertheless a conveyancing solicitor can advise if you are eligible to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 |
The conveyancers that we work with undertake Yarm lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Freddie was the the leasehold proprietor of a high value apartment in Yarm on the market with a lease of just over 72 years outstanding. Freddie informally contacted his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 annually. No ground rent would be due on a lease extension were Freddie to invoke his statutory right. Freddie obtained expert advice and was able to make an informed decision and deal with the matter and sell the property.
Dr Jacob Collins was assigned a lease of a garden apartment in Yarm in November 2004. We are asked if we could approximate the premium would likely be for a 90 year lease extension. Identical flats in Yarm with 100 year plus lease were worth £206,200. The average ground rent payable was £55 billed yearly. The lease concluded in 2081. Considering the 56 years unexpired we approximated the premium to the freeholder for the lease extension to be within £31,400 and £36,200 exclusive of professional charges.
Last year we were e-mailed by Dr P Leroy , who bought a studio apartment in Yarm in June 1997. The question was if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Comparative flats in Yarm with 100 year plus lease were in the region of £300,000. The average amount of ground rent was £50 collected monthly. The lease finished in 2101. Considering the 76 years unexpired we estimated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 plus expenses.