Unfortunately that a Newington residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Newington property prices.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If lease term dips under eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Newington will be able to extend under the legislation; however a conveyancer should be able to clarify if you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the process.
Leasehold premises in Newington with over one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service will provide you increased control over the value of your Newington leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Lucas, came very near to the 80-year mark with the lease on his ground floor flat in Newington. In buying his home two decades ago, the length of the lease was of no interest. Fortunately, he recognised he needed to take action soon on a lease extension. Lucas was able to extend his lease at the eleventh hour in June. Lucas and the freeholder via the managing agents ultimately settled on sum of £5,500 . If the lease had dipped to less than eighty years, the amount would have become more exhorbitant by a minimum £850.
Mr and Mrs. S Mercier acquired a one bedroom apartment in Newington in April 2003. The question was if we could approximate the price could be to extend the lease by a further 90 years. Comparative homes in Newington with a long lease were in the region of £295,000. The average ground rent payable was £45 billed every twelve months. The lease ended on 16 March 2101. Having 75 years as a residual term we calculated the premium to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of fees.
An example of a Freehold Enfranchisement decision 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 unexpired residue of the current lease was 107 years.