Unfortunately that a Newton Abbot residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Newton Abbot property prices.Once your lease nears 85ish years, you need to start considering 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 slips lower than 80 years - otherwise a higher premium will be due. Most flat owners in Newton Abbot will be able to extend under the legislation; however a conveyancer should be able to confirm if you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer for the duration of the process.
It is generally considered that a residential leasehold with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the premises will be worth the same as a freehold for many years ahead.
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with undertake Newton Abbot 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.
Henry owned a 2 bedroom flat in Newton Abbot on the market with a lease of fraction over sixty years remaining. Henry informally approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Henry to exercise his statutory right. Henry obtained expert legal guidance and secured satisfactory deal without going to tribunal and ending up with a market value flat.
Mr and Mrs. H Gómez acquired a purpose-built flat in Newton Abbot in April 1996. The question was if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Comparative premises in Newton Abbot with a long lease were valued around £210,600. The mid-range ground rent payable was £45 invoiced monthly. The lease end date was on 26 May 2087. Having 62 years outstanding we approximated the premium to the freeholder to extend the lease to be between £18,100 and £20,800 not including legals.
Last month we were approach by Mr and Mrs. W Hernández , who took over the lease of a newly refurbished apartment in Newton Abbot in July 2012. We are asked if we could estimate the price would likely be to extend the lease by 90 years. Identical residencies in Newton Abbot with 100 year plus lease were in the region of £265,000. The mid-range ground rent payable was £50 billed yearly. The lease finished on 18 August 2098. Considering the 73 years left we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of legals.