Unfortunately that a Newtown residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Newtown property market.Once your lease nears 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls below 80 years - otherwise a higher premium will be due. The majority of flat owners in Newtown will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold residencies in Newtown with more than 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you enhanced control over the value of your Newtown leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Last October Ali, came very close to the eighty-year threshold with the lease on his leasehold apartment in Newtown. Having bought his home 19 years ago, the lease term was of minimal relevance. Fortunately, he became aware that he would soon be paying an escalated premium for a lease extension. Ali was able to extend his lease just ahead of time in April. Ali and the freeholder eventually agreed on a premium of £6,000 . If he not met the deadline, the price would have escalated by a minimum £950.
Mr Nathaniel Pérez acquired a garden apartment in Newtown in May 2007. The dilemma was if we could approximate the premium would likely be for a 90 year extension to my lease. Similar residencies in Newtown with 100 year plus lease were valued around £205,000. The average amount of ground rent was £50 invoiced per annum. The lease elapsed in 2105. Given that there were 79 years unexpired we calculated the premium to the landlord to extend the lease to be between £7,600 and £8,800 exclusive of professional charges.
Last month we were contacted by Mrs Lauren Davis , who moved into a newly refurbished apartment in Newtown in March 1997. The question was if we could approximate the premium could be for a ninety year extension to my lease. Similar homes in Newtown with a long lease were valued about £270,000. The average ground rent payable was £65 invoiced annually. The lease came to a finish on 7 June 2094. Having 68 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 plus professional charges.