The re-sale value of a leasehold property in Newton Aycliffe depends on how many years the lease has left to run. If it is near to or fewer than eighty years you should expect problems on re-sale, so it is recommended to arrange for the lease to be extended prior to buying. It is ideal to start the lease extension process when a lease still has 82 years remaining so that a lease extension can be concluded well before the 80 year cut off point. Current legislation enables Newton Aycliffe qualifying lessees to an additional term of ninety years over and above the remaining term, at a nominal rent (zero ground rent). The reason of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| 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. |
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Retaining our service gives you enhanced control over the value of your Newton Aycliffe leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last Autumn Finn, came perilously close to the eighty-year threshold with the lease on his garden apartment in Newton Aycliffe. Having bought his flat two decades ago, the unexpired term was of little interest. As luck would have it, he noticed he would soon be paying an inflated amount for a lease extension. Finn extended the lease just in the nick of time in April. Finn and the landlord who owned the flat above ultimately agreed on sum of £6,000 . If the lease had slid to less than 80 years, the price would have escalated by at least £1,125.
Last year we were e-mailed by Mr and Mrs. F Jackson , who moved into a ground floor apartment in Newton Aycliffe in July 1999. The dilemma was if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Identical properties in Newton Aycliffe with an extended lease were worth £233,200. The average amount of ground rent was £60 billed every twelve months. The lease finished on 15 September 2087. Having 61 years left we approximated the premium to the freeholder to extend the lease to be between £22,800 and £26,400 plus costs.
Last month we were called by Dr Natasha Collins , who acquired a first floor flat in Newton Aycliffe in September 2001. We are asked if we could shed any light on how much (roughly) premium would likely be to prolong the lease by 90 years. Comparative properties in Newton Aycliffe with an extended lease were valued about £171,800. The mid-range ground rent payable was £55 invoiced quarterly. The lease ran out on 18 August 2076. Having 50 years remaining we calculated the compensation to the landlord to extend the lease to be between £33,300 and £38,400 not including fees.