Newmarket residential property owned on a long lease is a wasting asset as the leaseholder merely owns the property for a period of years.
Leasehold premises in Newmarket with in excess of one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 lawyers that we work with handle Newmarket 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 lawyer we work with provide it.
Off the back of protracted correspondence with the landlord of her basement apartment in Newmarket, Natalie commenced the lease extension process as the eighty year threshold was fast advancing. The transaction was finalised in January 2011. The landlord’s charges were negotiated to about six hundred GBP.
Mr W Petit bought a ground floor flat in Newmarket in April 1997. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Comparative premises in Newmarket with a long lease were in the region of £216,000. The mid-range ground rent payable was £60 collected quarterly. The lease ran out in 2083. Given that there were 58 years left we calculated the premium to the landlord for the lease extension to be between £28,500 and £33,000 exclusive of expenses.
Last Autumn we were called by Ms B Rodríguez , who completed a garden flat in Newmarket in September 2011. The dilemma was if we could approximate the premium would likely be to prolong the lease by a further 90 years. Similar homes in Newmarket with a long lease were in the region of £205,000. The average amount of ground rent was £50 collected per annum. The lease lapsed on 3 March 2103. Considering the 78 years left we estimated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 not including expenses.