For anyone whose New Mills property is held on a long lease, the message is clear – if no remedial action is taken, the property will eventually revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to procure a lease extension.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the premises will be worth the same as a freehold for many years in the future.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Regardless of whether you are a tenant or a landlord in New Mills,the lease extension experts that we work with will always be willing 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 Mills valuers.
18 months ago Nathaniel, started to get near to the 80-year threshold with the lease on his ground floor apartment in New Mills. In buying his home two decades ago, the unexpired term was of little significance. by good luck, he realised he would soon be paying way over the odds for Extending the lease. Nathaniel extended the lease just in the nick of time last March. Nathaniel and the freeholder via the managing agents ultimately settled on a premium of £5,500 . If the lease had slid to less than eighty years, the amount would have become more costly by at least £1,150.
Mr L Watson took over the lease of a one bedroom flat in New Mills in February 2003. The question was if we could estimate the price could be to prolong the lease by ninety years. Similar premises in New Mills with 100 year plus lease were valued about £166,800. The average ground rent payable was £50 billed quarterly. The lease came to a finish in 2076. Having 50 years left we calculated the compensation to the landlord to extend the lease to be within £32,300 and £37,400 not including fees.
Last Winter we were contacted by Mr R Gómez , who completed a first floor flat in New Mills in September 2011. We are asked if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Comparative properties in New Mills with an extended lease were in the region of £280,000. The mid-range ground rent payable was £45 billed annually. The lease lapsed in 2096. Having 70 years unexpired we calculated the premium to the landlord for the lease extension to be between £12,400 and £14,200 plus costs.