New Romney residential property held on a long lease is a depreciating asset because a leaseholder merely owns the property for a set term.
Leasehold properties in New Romney with more than 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Lease extensions in New Romney can be a difficult process. We recommend you get professional help from a lawyer and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with New Romney lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last October Jason, came seriously close to the eighty-year mark with the lease on his leasehold apartment in New Romney. Having purchased his home two decades ago, the length of the lease was of no interest. Fortunately, it dawned on him that he would imminently be paying an inflated amount for Extending the lease. Jason extended the lease at the eleventh hour last August. Jason and the landlord who owned the flat above subsequently settled on an amount of £5,000 . If he failed to meet the deadline, the figure would have increased by a minimum £1,000.
Last March we were contacted by Dr Rosie Phillips , who took over the lease of a studio apartment in New Romney in September 2008. We are asked if we could shed any light on how much (approximately) price could be to extend the lease by an additional years. Similar flats in New Romney with 100 year plus lease were in the region of £225,800. The average ground rent payable was £60 billed every twelve months. The lease end date was on 2 March 2086. Taking into account 60 years remaining we approximated the premium to the freeholder to extend the lease to be between £23,800 and £27,400 plus fees.
Mrs Francesca Jackson completed a newly refurbished flat in New Romney in April 2000. The dilemma was if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Comparable homes in New Romney with an extended lease were in the region of £210,000. The mid-range ground rent payable was £50 billed quarterly. The lease expired on 13 September 2106. Considering the 80 years outstanding we calculated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of professional charges.