The closer a domestic lease in New Inn gets to zero years unexpired, the more it reduces the value of the property. If the residual term has, more than 125 years to run then this decrease may be negligible that being said there will become a point in time when a lease has less than eighty years left as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main rational as to why you should extend the lease sooner than later. Most flat owners in New Inn will meet the qualifying criteria; nevertheless a conveyancing solicitor will be able to advise if you qualify for a lease extension. In limited situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
Leasehold residencies in New Inn with in excess of one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges merit it.
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The lawyers that we work with undertake 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 conveyancer we work with provide it.
Following unsuccessful correspondence with the landlord of her two bedroom apartment in New Inn, Sophia commenced the lease extension process just as the lease was coming close to the crucial 80-year mark. The transaction completed in February 2010. The freeholder’s charges were restricted to less than 650 GBP.
Mrs Ashleigh Cox owned a basement flat in New Inn in April 2000. We are asked if we could shed any light on how much (approximately) premium would be for a 90 year extension to my lease. Identical properties in New Inn with an extended lease were worth £295,000. The average ground rent payable was £45 billed annually. The lease ended on 21 September 2100. Having 74 years unexpired we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus legals.
Last Christmas we were approach by Mr and Mrs. H Bernard , who purchased a newly refurbished apartment in New Inn in July 2001. The question was if we could estimate the compensation to the landlord could be for a 90 year extension to my lease. Comparable premises in New Inn with an extended lease were in the region of £243,000. The mid-range ground rent payable was £65 billed quarterly. The lease terminated in 2089. Having 63 years remaining we approximated the compensation to the landlord for the lease extension to be within £20,000 and £23,000 exclusive of legals.