Newquay leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. It is the case that most Newquay tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Newquay you should see if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in Newquay,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Newquay valuers.
Riley was the the leasehold proprietor of a 2 bedroom flat in Newquay on the market with a lease of a little over 72 years unexpired. Riley on an informal basis contacted his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Riley to exercise his statutory right. Riley obtained expert legal guidance and secured satisfactory resolution informally and readily saleable.
Last month we were phoned by Mrs Katie Williams , who bought a ground floor flat in Newquay in February 1995. The question was if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Comparative properties in Newquay with an extended lease were worth £198,800. The average amount of ground rent was £55 collected per annum. The lease came to a finish on 11 August 2080. Taking into account 55 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £33,300 and £38,400 not including costs.
Mr and Mrs. E Hill acquired a ground floor flat in Newquay in May 2010. The question was if we could estimate the premium would be for a ninety year lease extension. Similar properties in Newquay with a long lease were valued around £295,000. The mid-range amount of ground rent was £50 collected every twelve months. The lease finished in 2100. Considering the 75 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of legals.