The market value of New Inn leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase significantly once the remaining term is less than eighty years
Leasehold premises in New Inn with in excess of 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
The conveyancing solicitors that we work with handle New Inn 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 conveyancing solicitor we work with provide it.
After unsuccessful negotiations with the landlord of her ground floor flat in New Inn, Eleanor started the lease extension process as the eighty year mark was swiftly advancing. The lease extension was concluded in June 2012. The freeholder’s costs were kept to an absolute minimum.
Last month we were contacted by Dr Tyler Johnson , who bought a basement flat in New Inn in April 1997. The dilemma was if we could approximate the price would be for a 90 year lease extension. Comparative homes in New Inn with 100 year plus lease were worth £198,800. The mid-range amount of ground rent was £55 billed yearly. The lease came to a finish in 2081. Taking into account 55 years remaining we approximated the compensation to the freeholder for the lease extension to be between £33,300 and £38,400 plus expenses.
Mr and Mrs. U Green completed a newly refurbished apartment in New Inn in October 1999. The question was if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparable residencies in New Inn with a long lease were worth £300,000. The mid-range amount of ground rent was £50 invoiced every twelve months. The lease ran out in 2101. Having 75 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 not including professional charges.