Unfortunately that a Needham Market 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 first few years due to the loss of value being disguised by increases in the Needham Market property market.Where your lease has approximately ninety years left, 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 falls lower than eighty years - otherwise a higher premium will be payable. The majority of flat owners in Needham Market will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your conveyancer throughout the formalities.
It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
Irrespective of whether you are a tenant or a freeholder in Needham Market,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Needham Market valuers.
Milo owned a studio flat in Needham Market on the market with a lease of just over 59 years remaining. Milo on an informal basis contacted his landlord a well known local-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Milo to exercise his statutory right. Milo obtained expert legal guidance and was able to make an informed decision and handle with the matter and sell the property.
Mrs Charlotte Jones bought a basement flat in Needham Market in July 1995. The question was if we could approximate the premium could be for a 90 year extension to my lease. Similar premises in Needham Market with 100 year plus lease were in the region of £191,400. The mid-range amount of ground rent was £55 collected quarterly. The lease ended in 2079. Having 54 years unexpired we estimated the compensation to the landlord to extend the lease to be between £34,200 and £39,600 not including fees.
In 2009 we were contacted by Ms Y Wright who, having bought a first floor flat in Needham Market in March 2005. We are asked if we could estimate the premium would be for a ninety year lease extension. Identical residencies in Needham Market with an extended lease were in the region of £295,000. The average ground rent payable was £45 invoiced monthly. The lease ran out in 2099. Taking into account 74 years left we estimated the premium to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of fees.