Newbridge leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Newbridge residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Newbridge you would be well advised to investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years remaining, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Newbridge,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Newbridge valuers.
16 months ago Theo, came dangerously close to the 80-year mark with the lease on his leasehold apartment in Newbridge. Having bought his flat 18 years ago, the unexpired term was of no bearing. As luck would have it, it dawned on him that he would imminently be paying an escalated premium for Extending the lease. Theo was able to extend his lease just under the wire last September. Theo and the freeholder via the managing agents in the end settled on sum of £5,000 . If he not met the deadline, the premium would have gone up by a minimum £1,000.
In 2009 we were phoned by Mr and Mrs. I Mason who, having bought a recently refurbished apartment in Newbridge in November 2004. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Comparable homes in Newbridge with an extended lease were in the region of £256,600. The average ground rent payable was £60 invoiced quarterly. The lease elapsed on 25 July 2078. Given that there were 52 years outstanding we estimated the compensation to the landlord for the lease extension to be within £39,000 and £45,000 exclusive of costs.
Last Summer we were called by Dr Evan Cook , who moved into a garden flat in Newbridge in January 1998. We are asked if we could approximate the premium would likely be for a 90 year lease extension. Identical residencies in Newbridge with 100 year plus lease were worth £218,000. The average amount of ground rent was £45 billed monthly. The lease terminated on 3 November 2089. Having 63 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £17,100 and £19,800 plus professional charges.