The value of New Inn leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate substantially once the remaining term is below than eighty years
It is conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
Lease extensions in New Inn can be a difficult process. We recommend you obtain guidance from a lawyer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with New Inn lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
After lengthy discussions with the landlord of her two bedroom apartment in New Inn, Jasmine started the lease extension process as the eighty year mark was rapidly approaching. The lease extension was concluded in January 2012. The freeholder’s costs were restricted to less than 450 pounds.
In 2014 we were approached by Mr Kian André who, having was assigned a lease of a ground floor flat in New Inn in September 2002. We are asked if we could shed any light on how much (approximately) price would likely be for a ninety year extension to my lease. Identical flats in New Inn with 100 year plus lease were worth £290,000. The average amount of ground rent was £45 billed per annum. The lease came to a finish in 2098. Given that there were 72 years remaining we calculated the compensation to the freeholder to extend the lease to be within £11,400 and £13,200 exclusive of legals.
Dr Leon Cooper purchased a studio apartment in New Inn in November 2009. The dilemma was if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparative properties in New Inn with an extended lease were valued around £233,200. The average amount of ground rent was £60 collected per annum. The lease terminated on 7 February 2087. Having 61 years unexpired we approximated the premium to the landlord for the lease extension to be within £22,800 and £26,400 plus legals.