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Top reasons for Newington lease extension


Top reasons for lease extension now:

A Newington lease depreciates with the years remaining on the lease.

It’s an underpublicised certainty that a Newington residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Newington property prices.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under eighty years - otherwise a higher premium will be due. Most leasehold owners in Newington will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.

An extended lease is almost the same value as a freehold

It is generally accepted that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 30 years left, the premises will be equivalent in value to a freehold for many years ahead.

Mortgage lenders may decide not to finance a property on a short lease

The propensity since over the last decade has been for mortgage companies to tighten lending criteria generally - this has extended to the property over which the home loan is to be charged. This has meant the minimum number of years remaining under the lease required by banks has increased. Historically lenders would grant a mortgage on a lease with twenty years plus the term of the loan - routinely 50 year leases but those requirements evolved by the requirement for lengthy leases - many now have a minimum term of 75 years as standard.

Lender Requirement
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.
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.
Halifax Minimum 70 years from the date of the mortgage.
Leeds Building Society 85 years remaining from the start of the mortgage.
Royal Bank of Scotland Mortgage term plus 30 years.

Why use us for your lease extension in Newington?

The conveyancers that we work with undertake Newington 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 conveyancer we work with provide it.

Newington Lease Extension Example Cases:

Isaac, Newington, South East London,

Isaac was the the leasehold owner of a 2 bedroom flat in Newington being sold with a lease of just over 59 years outstanding. Isaac on an informal basis approached his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Isaac to exercise his statutory right. Isaac obtained expert legal guidance and was able to make an informed judgement and deal with the matter and ending up with a market value flat.

Newington case:

Mr E Fournier acquired a recently refurbished flat in Newington in September 2000. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a ninety year lease extension. Identical homes in Newington with an extended lease were worth £189,000. The average amount of ground rent was £55 invoiced yearly. The lease concluded on 9 September 2077. Having 53 years unexpired we approximated the compensation to the landlord for the lease extension to be within £28,500 and £33,000 plus fees.

Decision in Tower Hamlets

An example of a Freehold Enfranchisement decision for a Newington property is 1-41 Royal Tower Lodge 40 Cartwright Street in April 2013. the tribunal adding the agreed value of capitalised ground rents and the reversion the price to be paid for the freehold was £1,187,000 This case related to 41 flats. The unexpired term as at the valuation date was 107 years.