Unfortunately that a New Invention residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. 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 New Invention property prices.Once your lease nears 85ish years, you need to start thinking about 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 slips under 80 years - otherwise a higher premium will be due. The majority of flat owners in New Invention will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a landlord in New Invention,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 in-depth market knowledge and the close ties they enjoy with New Invention valuers.
Jack owned a studio flat in New Invention on the market with a lease of fraction over fifty eight years left. Jack on an informal basis spoke with his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Jack to exercise his statutory right. Jack procured expert advice and was able to make an informed judgement and handle with the matter and readily saleable.
In 2012 we were approached by Ms Rosie Stewart who, having moved into a one bedroom flat in New Invention in November 2002. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to prolong the lease by ninety years. Comparable properties in New Invention with 100 year plus lease were worth £250,400. The mid-range amount of ground rent was £65 billed every twelve months. The lease elapsed on 10 September 2090. Taking into account 64 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £19,000 and £22,000 exclusive of expenses.
In 2012 we were phoned by Mr and Mrs. L Laurent who, having moved into a studio apartment in New Invention in February 2007. The dilemma was if we could approximate the premium would be to extend the lease by an additional years. Identical homes in New Invention with a long lease were in the region of £189,000. The mid-range ground rent payable was £55 billed monthly. The lease ended in 2079. Having 53 years unexpired we approximated the premium to the landlord to extend the lease to be within £28,500 and £33,000 plus fees.