With a domestic leasehold premises in Newbridge, you effectively rent it for a certain period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider a lease extension sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive especially once there are fewer than eighty years left. Leasehold owners in Newbridge with a lease approaching 81 years left should seriously consider extending it sooner rather than later. Once a lease has under eighty years remaining, under the relevant Act the freeholder can calculate and levy a greater amount, assessed on a technical computation, strangely termed as “marriage value” which is due.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you better control over the value of your Newbridge leasehold, as your property will be more valuable and saleable in terms of 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.
George owned a high value apartment in Newbridge being sold with a lease of a little over fifty eight years remaining. George on an informal basis spoke with his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £100 annually. Ordinarily, ground rent would not be due on a lease extension were George to exercise his statutory right. George procured expert advice and secured satisfactory resolution informally and readily saleable.
Dr Thomas Davies bought a basement apartment in Newbridge in May 2003. We are asked if we could approximate the premium would be to extend the lease by an additional years. Comparative residencies in Newbridge with an extended lease were in the region of £246,800. The average amount of ground rent was £60 invoiced yearly. The lease came to a finish on 3 May 2074. Given that there were 50 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £44,700 and £51,600 not including costs.
Mr and Mrs. P Baker was assigned a lease of a recently refurbished apartment in Newbridge in August 2009. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Comparative premises in Newbridge with 100 year plus lease were in the region of £208,200. The average ground rent payable was £65 collected per annum. The lease ran out in 2085. Given that there were 61 years unexpired we estimated the compensation to the landlord for the lease extension to be between £20,000 and £23,000 exclusive of fees.