The market value of a leasehold property in Newmarket is impacted by how many years the lease has remaining. If it is close to or less than 80 years you should anticipate problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of buying. Ideally one should start the lease extension process when a lease still has 82 years remaining so that a lease extension can be addressed in advance of the 80 year mark. Leasehold Reform legislation entitles Newmarket qualifying lessees to an additional term of ninety years in addition to the remaining term, at a nominal rent (zero ground rent). The intention of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Newmarket with in excess of 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value 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 justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | |
| Chelsea Building Society | |
| Godiva Mortgages | |
| Leeds Building Society | |
| National Westminster Bank |
The lawyers that we work with procure 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 conveyancer we work with provide it.
Joseph owned a conversion flat in Newmarket on the market with a lease of a few days over fifty eight years remaining. Joseph informally approached his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £100 annually. No ground rent would be payable on a lease extension were Joseph to invoke his statutory right. Joseph obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and readily saleable.
In 2013 we were phoned by Ms A Young who, having bought a garden flat in Newmarket in September 2010. We are asked if we could approximate the compensation to the landlord would be to extend the lease by ninety years. Comparative residencies in Newmarket with an extended lease were valued about £300,000. The average ground rent payable was £50 billed monthly. The lease termination date was in 2101. Given that there were 75 years unexpired we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of professional charges.
Last Christmas we were phoned by Dr F García , who owned a ground floor apartment in Newmarket in November 2003. The question was if we could shed any light on how much (roughly) premium could be to extend the lease by an additional years. Similar residencies in Newmarket with a long lease were worth £250,400. The mid-range amount of ground rent was £65 invoiced every twelve months. The lease elapsed in 2090. Taking into account 64 years left we estimated the compensation to the freeholder for the lease extension to be between £19,000 and £22,000 plus costs.