The nearer a residential lease in New Covent Garden gets to zero years unexpired, the more it reduces the value of the property. Where the residual term has, more than 99 years remaining then this decrease may be of little impact nevertheless there will become a point in time when a lease has less than 80 years remaining as part of the premium you will incur is what is known as a marriage value. This could increase sharply the cost. It is the primary logic behind why you should extend the lease without delay. The majority of flat owners in New Covent Garden will qualify for this right; however a conveyancer can confirm whether you are eligible for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
Leasehold properties in New Covent Garden with over one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges justify it.
| 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. |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in New Covent Garden,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with New Covent Garden valuers.
16 months ago Liam, started to get near to the 80-year mark with the lease on his purpose- built apartment in New Covent Garden. Having purchased his flat two decades ago, the lease term was of no relevance. As luck would have it, it dawned on him that he would soon be paying an escalated premium for Extending the lease. Liam arranged for a lease extension at the eleventh hour last September. Liam and the landlord who owned the flat above subsequently settled on the final figure of £6,000 . If the lease had dropped to less than 80 years, the amount would have gone up by at least £975.
Last Christmas we were approach by Mr and Mrs. J Brown , who completed a ground floor apartment in New Covent Garden in March 2012. The dilemma was if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparative residencies in New Covent Garden with a long lease were worth £210,600. The average amount of ground rent was £45 billed every twelve months. The lease concluded in 2087. Taking into account 62 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £18,100 and £20,800 plus expenses.
In 2010 we were phoned by Mr and Mrs. R Leroy who, having completed a one bedroom flat in New Covent Garden in July 2001. We are asked if we could estimate the price would be for a ninety year lease extension. Similar premises in New Covent Garden with 100 year plus lease were worth £265,000. The mid-range ground rent payable was £50 billed yearly. The lease ran out in 2098. Taking into account 73 years unexpired we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including expenses.