With a residential leasehold premises in Newbury, you are actually purchasing a right to reside in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should consider extending the lease sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately greater notably once there are less than 80 years left. Anyone in Newbury with a lease approaching 81 years left should seriously think of extending it without delay. Once the lease term has fewer than 80 years left, under the relevant Act the freeholder is entitled to calculate and demand a larger amount, based on a technical multiplication, strangely termed as “marriage value” which is payable.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| 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 gives you increased control over the value of your Newbury leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Spring Sebastian, came critically near to the eighty-year mark with the lease on his basement apartment in Newbury. In buying his home two decades ago, the length of the lease was of little significance. Thankfully, he became aware that he needed to take action soon on a lease extension. Sebastian was able to extend his lease just ahead of time last June. Sebastian and the landlord who owned the flat above in the end settled on a premium of £6,000 . If the lease had descended below 80 years, the amount would have escalated by at least £1,050.
Last year we were phoned by Mr and Mrs. F Jackson , who acquired a first floor flat in Newbury in May 2012. We are asked if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Comparable properties in Newbury with a long lease were worth £189,000. The mid-range amount of ground rent was £55 invoiced per annum. The lease came to a finish in 2079. Having 53 years outstanding we approximated the compensation to the landlord to extend the lease to be between £28,500 and £33,000 not including expenses.
Last Autumn we were contacted by Mr and Mrs. R Ward , who was assigned a lease of a studio apartment in Newbury in February 2005. We are asked if we could shed any light on how much (roughly) premium would be to extend the lease by ninety years. Comparable flats in Newbury with a long lease were worth £290,000. The average ground rent payable was £45 invoiced monthly. The lease lapsed on 15 January 2099. Considering the 73 years remaining we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of fees.