Unfortunately that a Newbiggin By The Sea residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Newbiggin By The Sea property prices.Where your lease has approximately ninety years left, you should start thinking about a lease extension. If lease term falls under eighty years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Newbiggin By The Sea will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to follow 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 property with in excess of 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 30 years unexpired, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| Chelsea 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The conveyancers that we work with procure Newbiggin By The Sea lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Mason owned a high value flat in Newbiggin By The Sea being marketed with a lease of a few days over 61 years remaining. Mason informally spoke with his freeholder a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £100 yearly. Ordinarily, ground rent would not be due on a lease extension were Mason to invoke his statutory right. Mason procured expert legal guidance and secured an acceptable resolution informally and ending up with a market value flat.
Dr P Morris was assigned a lease of a garden flat in Newbiggin By The Sea in November 2012. The dilemma was if we could approximate the price would likely be to prolong the lease by a further 90 years. Comparative flats in Newbiggin By The Sea with 100 year plus lease were valued about £227,800. The average amount of ground rent was £45 billed per annum. The lease expiry date was on 9 February 2090. Considering the 65 years outstanding we approximated the premium to the landlord to extend the lease to be within £13,300 and £15,400 plus costs.
Mr and Mrs. O Bennett purchased a purpose-built apartment in Newbiggin By The Sea in February 2004. We are asked if we could approximate the premium would be for a 90 year lease extension. Comparable homes in Newbiggin By The Sea with a long lease were in the region of £275,000. The mid-range amount of ground rent was £55 billed quarterly. The lease expiry date was on 7 March 2101. Given that there were 76 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including professional charges.