Newington leases on domestic properties are gradually losing value. if your lease has in the region of ninety years unexpired, you should start thinking about a lease extension. If lease term is less than eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Leasehold owners in Newington will usually qualify for a lease extension; however a solicitor will confirm if you qualify. In certain cases you may not be entitled. There are also strict deadlines and steps to comply with once the process is triggered so it’s sensible to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a property with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with handle 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.
Last Spring Luke, came dangerously close to the 80-year mark with the lease on his garden flat in Newington. In buying his home two decades ago, the unexpired term was of little significance. Fortunately, it dawned on him that he needed to take steps soon on a lease extension. Luke extended the lease at the eleventh hour in June. Luke and the landlord who owned the flat above ultimately settled on the final figure of £5,500 . If the lease had dropped to less than eighty years, the price would have increased by a minimum £1,125.
Last April we were phoned by Dr O Girard , who bought a first floor apartment in Newington in April 2005. The question was if we could shed any light on how much (approximately) premium would likely be to extend the lease by a further 90 years. Similar premises in Newington with an extended lease were in the region of £267,600. The average amount of ground rent was £65 collected monthly. The lease terminated on 10 August 2092. Having 67 years left we estimated the premium to the landlord to extend the lease to be within £14,300 and £16,400 exclusive of legals.
An example of a Freehold Enfranchisement case for a Newington flat 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 number of years remaining on the existing lease(s) was 107 years.