As the length of the unexpired term of a Newark domestic lease diminished so does its value and therefore the value of your property. Where the lease has, over one hundred years to run then this decrease may be of little impact however there will become a point in time when a lease has under than eighty years remaining as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the primary reason why you should consider extending without delay. The majority of flat owners in Newark will qualify for this right; that being said a conveyancing solicitor should be able to advise if you qualify for a lease extension. In limited situations you may not qualify, the most common reason being that you have owned the property for less than two years.
It is generally accepted that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| 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. |
| Coventry Building Society | 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service will provide you enhanced control over the value of your Newark leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Nathan owned a conversion apartment in Newark being sold with a lease of a little over 61 years left. Nathan informally approached his landlord being a well known local-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent to start with set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Nathan to exercise his statutory right. Nathan obtained expert advice and secured satisfactory resolution informally and ending up with a market value flat.
In 2011 we were e-mailed by Mr Jack Pérez who, having acquired a one bedroom apartment in Newark in July 2012. The question was if we could shed any light on how much (roughly) premium would likely be to prolong the lease by 90 years. Identical residencies in Newark with 100 year plus lease were worth £275,000. The mid-range ground rent payable was £55 billed every twelve months. The lease concluded on 25 April 2101. Given that there were 76 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus expenses.
Last Winter we were contacted by Mrs S James , who bought a one bedroom apartment in Newark in November 1996. We are asked if we could shed any light on how much (roughly) price could be for a 90 year lease extension. Comparable homes in Newark with an extended lease were in the region of £176,200. The average amount of ground rent was £65 collected every twelve months. The lease lapsed on 3 June 2081. Taking into account 56 years remaining we approximated the premium to the freeholder to extend the lease to be between £29,500 and £34,000 exclusive of legals.