With a domestic leasehold premises in Newtown, you are actually buying a right to live in a property for a set period of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you should think about extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly notably once there are fewer than 80 years left. Leasehold owners in Newtown with a lease nearing 81 years unexpired should seriously consider extending it sooner as opposed to later. When a lease has fewer than eighty years remaining, under the current legislation the landlord is entitled to calculate and demand a larger premium, based on a technical multiplication, strangely termed as “marriage value” which is due.
It is generally accepted that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 45 years remaining, the property will be worth the same as a freehold for many years ahead.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Newtown can be a difficult process. We recommend you obtain professional help from a lawyer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Newtown lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In the wake of 6 months of protracted discussions with the landlord of her purpose-built apartment in Newtown, Phoebe commenced the lease extension process as the 80 year mark was quickly coming. The transaction was concluded in October 2013. The landlord’s charges were kept to an absolute minimum.
Mr Zachary Ricardo owned a first floor apartment in Newtown in July 1999. We are asked if we could estimate the premium would be to extend the lease by 90 years. Comparative properties in Newtown with an extended lease were worth £300,000. The average ground rent payable was £50 invoiced every twelve months. The lease elapsed on 24 July 2100. Given that there were 75 years unexpired we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 plus professional charges.
Last Christmas we were approach by Mr and Mrs. L Michel , who purchased a garden flat in Newtown in March 1995. The question was if we could approximate the price would likely be to extend the lease by 90 years. Identical flats in Newtown with 100 year plus lease were valued about £250,400. The average amount of ground rent was £65 billed monthly. The lease terminated in 2089. Given that there were 64 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £19,000 and £22,000 not including costs.