It’s a harsh truth that a Newbridge residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Newbridge property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. If lease term dips under 80 years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most flat owners in Newbridge will be able to extend under the legislation; however a lawyer will be able to clarify if you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancer throughout the formalities.
Leasehold residencies in Newbridge with in excess of 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
Engaging our service gives you better control over the value of your Newbridge leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Luke, started to get near to the eighty-year threshold with the lease on his leasehold apartment in Newbridge. In buying his property twenty years ago, the length of the lease was of minimal importance. Fortunately, it dawned on him that he would imminently be paying an inflated amount for a lease extension. Luke extended the lease just under the wire in June. Luke and the freeholder ultimately agreed on the final figure of £5,500 . If he had missed the deadline, the amount would have escalated by at least £1,150.
Last Autumn we were called by Dr I Roberts , who moved into a garden flat in Newbridge in January 2010. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Comparable properties in Newbridge with an extended lease were valued about £176,200. The mid-range amount of ground rent was £65 billed annually. The lease expired in 2082. Taking into account 56 years left we approximated the premium to the freeholder for the lease extension to be between £29,500 and £34,000 exclusive of professional charges.
Mr and Mrs. L Wright owned a garden apartment in Newbridge in February 2003. The question was if we could approximate the compensation to the landlord would be to extend the lease by ninety years. Comparable flats in Newbridge with 100 year plus lease were valued about £242,600. The mid-range amount of ground rent was £45 collected every twelve months. The lease lapsed on 10 January 2093. Having 67 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £11,400 and £13,200 plus fees.