The market value of a leasehold property in Newcastle under Lyme depends on how many years the lease has left to run. If it is near to or fewer than 80 years you should expect problems on re-sale, so it is recommended to arrange for the lease to be extended before purchasing. It is ideal to start the process of extending the lease is when the lease still has 82 years to run so that a lease extension can be concluded prior to the 80 year mark. Current legislation entitles Newcastle under Lyme qualifying lessees to an additional term of ninety years in addition to the unexpired term, at a peppercorn rent (no ground rent). The intention of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Newcastle under Lyme with in excess of one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service will provide you better control over the value of your Newcastle under Lyme leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Rory owned a high value flat in Newcastle under Lyme being marketed with a lease of fraction over fifty eight years left. Rory on an informal basis approached his freeholder being a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Rory to exercise his statutory right. Rory procured expert legal guidance and was able to make an informed decision and deal with the matter and sell the property.
In 2009 we were called by Dr Isaac Adams who, having bought a basement apartment in Newcastle under Lyme in May 2004. The question was if we could approximate the compensation to the landlord would be for a ninety year lease extension. Comparative properties in Newcastle under Lyme with 100 year plus lease were in the region of £240,600. The mid-range amount of ground rent was £60 invoiced annually. The lease elapsed in 2088. Considering the 62 years left we estimated the premium to the landlord for the lease extension to be between £21,900 and £25,200 not including costs.
In 2010 we were approached by Ms Ashleigh Cook who, having bought a studio apartment in Newcastle under Lyme in January 1997. The dilemma was if we could estimate the premium would likely be to extend the lease by an additional years. Comparable properties in Newcastle under Lyme with an extended lease were worth £174,200. The mid-range ground rent payable was £55 collected every twelve months. The lease came to a finish on 1 April 2077. Taking into account 51 years outstanding we estimated the premium to the landlord to extend the lease to be between £31,400 and £36,200 exclusive of expenses.