The re-sale value of a leasehold property in New Mills depends on how many years the lease has left to run. If it is near to or fewer than eighty years you should foresee problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. It is preferable to commence the lease extension process when a lease still has 82 years remaining so that formalities can be finalised prior to the eighty year mark. Current legislation enables New Mills qualifying lessees to a 90 year extension added to their remaining lease term (ie if your lease has fifty years left the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 30 years remaining, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Retaining our service will provide you enhanced control over the value of your New Mills leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Nathaniel, started to get near to the 80-year threshold with the lease on his two bedroom apartment in New Mills. In buying his home twenty years previously, the unexpired term was of little bearing. Thankfully, he recognised he would imminently be paying an inflated amount for Extending the lease. Nathaniel arranged for a lease extension just in the nick of time in July. Nathaniel and the freeholder via the managing agents eventually agreed on the final figure of £5,000 . If he had missed the deadline, the sum would have gone up by a minimum £900.
Last Summer we were contacted by Mr Nathan Simon , who was assigned a lease of a basement apartment in New Mills in October 2003. The question was if we could estimate the premium would likely be for a 90 year extension to my lease. Comparable premises in New Mills with 100 year plus lease were valued around £205,000. The average ground rent payable was £50 billed annually. The lease ended on 3 April 2104. Considering the 79 years remaining we approximated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 not including legals.
Last March we were contacted by Mr and Mrs. C Mason , who completed a ground floor apartment in New Mills in October 1998. The dilemma was if we could estimate the premium would be for a ninety year extension to my lease. Similar homes in New Mills with 100 year plus lease were worth £275,000. The mid-range ground rent payable was £65 invoiced annually. The lease lapsed on 28 August 2093. Considering the 68 years outstanding we estimated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 plus professional charges.