A specialist property lawyer has issued a warning to the growing number of homeowners where the age of their home is reaching a critical time milestone.
Sue Toomey of Cramlington based specialist property lawyers, Toomey Legal has noticed a worrying trend whereby homeowners wishing to sell their leasehold property are now finding that they are unable to do so easily without either buying the freehold or paying thousands to extend the lease term. Without this the property is unmortgagable so the value of the property is significantly lower.
The problem is particularly prevalent in housing estates built in the 1960’s and 70’s in new towns such as Killingworth, Cramlington and Washington where less than 60 years are left on the leasehold term.
As Sue explains, when the homes were built, a 99 year lease with an annual rent of £20 seemed fine but later buyers who bought from the original owners are now feeling the pressure.
“When you buy a leasehold property you agree to pay ground rent each year on your flat or house. Usually this is a small token amount so it comes as a massive surprise when a request to buy it outright can run into many thousands of pounds. Consent is required for any alterations to the property and this is often overlooked by owners. It is not the same as having a planning permission or building regulation approval and can be several hundreds of pounds.
“An added complication is that mortgage lenders may not grant a mortgage on homes with less than 60 years left on the lease which again could jeopodise any house sale.”
One particular case that Sue has encountered is a lease extension of a flat in West Denton Park. A neighbour had been offered a lease extension for a cost of £15,000 with the ground rent raising from £20 a year to a starting rent of £200 a year. The rent would then increase in line with inflation every year. A valuation was done (at a cost of a few hundred pounds) which valued the extension at £10,000 with no ground rent payable.
Sue added:
“ There is legislation which allows the owner of a leasehold property to purchase an extension of the lease term or to buy the freehold however this is costly and in some cases prohibitive. I’m determined to help people obtain a better deal without costly penalties or expensive lawyers fees. We can reduce the money payable and link it with a sale so that the deposit can be used to cover the costs when the owner does not have the cash saved to do this”
Sue can be contacted at: