It’s an underpublicised certainty that a Newark on Trent 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 early years due to the loss of value being disguised by increases in the Newark on Trent property prices.Once your lease nears 85ish years, you should 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 dips under eighty years - otherwise a higher premium will be due. The majority of flat owners in Newark on Trent will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm if you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
Leasehold residencies in Newark on Trent with in excess of one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Engaging our service will provide you enhanced control over the value of your Newark on Trent leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Trailing unsuccessful discussions with the landlord of her leasehold apartment in Newark on Trent, Francesca commenced the lease extension process as the 80 year mark was quickly approaching. The lease extension was finalised in February 2012. The freeholder’s costs were negotiated to approximately 450 pounds.
Last Christmas we were phoned by Mrs I Norbert , who owned a one bedroom flat in Newark on Trent in September 2009. We are asked if we could shed any light on how much (approximately) price would likely be to prolong the lease by an additional years. Comparable residencies in Newark on Trent with a long lease were worth £186,000. The mid-range amount of ground rent was £65 invoiced yearly. The lease ended on 2 January 2083. Having 58 years outstanding we estimated the premium to the freeholder for the lease extension to be within £24,700 and £28,600 plus fees.
In 2014 we were called by Dr H Jackson who, having completed a garden apartment in Newark on Trent in May 1995. We are asked if we could estimate the premium would be to extend the lease by an additional years. Identical homes in Newark on Trent with 100 year plus lease were in the region of £250,000. The mid-range amount of ground rent was £50 invoiced yearly. The lease elapsed on 3 June 2094. Given that there were 69 years left we estimated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of expenses.