It’s a harsh truth that a New Quay residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the New Quay property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. If lease term drops under eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in New Quay will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
Using our service gives you better control over the value of your New Quay leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Toby, started to get close to the eighty-year mark with the lease on his studio apartment in New Quay. Having bought his home 18 years ago, the length of the lease was of no bearing. Luckily, he became aware that he needed to take action soon on a lease extension. Toby arranged for a lease extension at the eleventh hour last August. Toby and the freeholder subsequently agreed on a premium of £6,000 . If the lease had dropped lower than 80 years, the price would have become more exhorbitant by a minimum £1,100.
In 2013 we were called by Mr and Mrs. F Gómez who, having owned a one bedroom apartment in New Quay in June 2001. We are asked if we could estimate the price could be for a 90 year lease extension. Comparable homes in New Quay with an extended lease were valued about £275,000. The mid-range amount of ground rent was £45 invoiced every twelve months. The lease finished in 2095. Taking into account 69 years remaining we calculated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 exclusive of legals.
Last Winter we were phoned by Mrs Melissa Roux , who owned a basement apartment in New Quay in September 2004. The dilemma was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Comparable flats in New Quay with 100 year plus lease were in the region of £216,000. The mid-range amount of ground rent was £60 billed every twelve months. The lease lapsed on 12 July 2084. Taking into account 58 years remaining we estimated the premium to the landlord for the lease extension to be within £28,500 and £33,000 not including fees.