Newton Aycliffe leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Newton Aycliffe tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Newton Aycliffe you would be well advised to see if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is generally accepted that a residential leasehold 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 45 years left, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 conveyancing solicitors that we work with handle Newton Aycliffe 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 conveyancing solicitor we work with provide it.
Two years ago Adam, came dangerously near to the eighty-year threshold with the lease on his one bedroom apartment in Newton Aycliffe. Having purchased his home 18 years ago, the lease term was of minimal concern. As luck would have it, it dawned on him that he needed to take action soon on Extending the lease. Adam arranged for a lease extension at the eleventh hour in June. Adam and the freeholder in the end agreed on a premium of £5,000 . If he had missed the deadline, the amount would have increased by at least £1,100.
In 2012 we were called by Dr G Mitchell who, having moved into a studio apartment in Newton Aycliffe in September 2003. The dilemma was if we could estimate the price would likely be to extend the lease by ninety years. Similar homes in Newton Aycliffe with a long lease were in the region of £200,000. The mid-range ground rent payable was £50 invoiced per annum. The lease finished in 2103. Given that there were 77 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 plus costs.
In 2012 we were approached by Ms U Jones who, having bought a studio apartment in Newton Aycliffe in June 2004. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by ninety years. Comparative residencies in Newton Aycliffe with a long lease were in the region of £260,200. The average ground rent payable was £65 collected every twelve months. The lease ended on 9 August 2092. Given that there were 66 years outstanding we approximated the premium to the freeholder to extend the lease to be within £15,200 and £17,600 not including legals.