The market value of a leasehold property in Newbury is impacted by how many years the lease has left to run. If it is close to or less than 80 years you should anticipate difficulties on re-sale, so it is recommended to arrange for a lease extension ahead of purchasing. Ideally one should start the process of extending the lease is when a lease still has 82 years remaining so that formalities can be concluded prior to the eighty year mark. Leasehold Reform legislation entitles Newbury qualifying lessees to an additional term of ninety years over and above the remaining term, at a peppercorn rent (zero ground rent). The purpose of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally considered that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the property will be equivalent in value to 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with procure Newbury 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 conveyancer we work with provide it.
Following lengthy negotiations with the freeholder of her leasehold flat in Newbury, Amelia commenced the lease extension process as the eighty year mark was swiftly advancing. The lease extension was finalised in April 2006. The landlord’s charges were kept to an absolute minimum.
In 2009 we were phoned by Mr and Mrs. R Roux who, having was assigned a lease of a recently refurbished apartment in Newbury in May 2008. The dilemma was if we could estimate the price could be to extend the lease by an additional years. Similar premises in Newbury with 100 year plus lease were in the region of £200,000. The mid-range amount of ground rent was £50 collected every twelve months. The lease concluded in 2103. Given that there were 77 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 plus expenses.
In 2010 we were called by Mrs Emily Richardson who, having bought a basement apartment in Newbury in February 2001. We are asked if we could approximate the price would be to extend the lease by a further 90 years. Comparable residencies in Newbury with an extended lease were worth £265,200. The mid-range ground rent payable was £65 billed annually. The lease finished on 13 March 2092. Taking into account 66 years left we approximated the compensation to the landlord for the lease extension to be within £15,200 and £17,600 exclusive of fees.