When it comes to domestic leasehold premises in Newtown, you are in fact renting it for a certain amount of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you may consider a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly particularly when there are fewer than 80 years remaining. Residents in Newtown with a lease approaching 81 years unexpired should seriously think of extending it as soon as possible. Once a lease has fewer than 80 years remaining, under the relevant legislation the freeholder is entitled to calculate and levy a larger premium, assessed on a technical computation, known as “marriage value” which is payable.
Leasehold residencies in Newtown with in excess of one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Newtown can be a difficult process. We recommend you obtain professional help from a lawyer and valuer 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 in-depth market knowledge procuring Newtown lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last year Dexter, came precariously near to the eighty-year mark with the lease on his first floor apartment in Newtown. In buying his property two decades ago, the unexpired term was of little significance. Luckily, he noticed he would imminently be paying an inflated amount for Extending the lease. Dexter extended the lease just in the nick of time in July. Dexter and the landlord in the end agreed on the final figure of £5,000 . If the lease had fallen to less than eighty years, the figure would have increased by at least £900.
In 2010 we were called by Dr Rhiannon White who, having took over the lease of a one bedroom apartment in Newtown in July 2003. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Identical flats in Newtown with an extended lease were worth £290,000. The mid-range amount of ground rent was £45 collected monthly. The lease ended on 27 June 2100. Given that there were 74 years left we calculated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of expenses.
Mr Muhammad Bell purchased a newly refurbished apartment in Newtown in May 2003. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by 90 years. Similar flats in Newtown with an extended lease were worth £243,000. The mid-range amount of ground rent was £65 collected monthly. The lease ran out in 2089. Considering the 63 years unexpired we estimated the premium to the freeholder for the lease extension to be within £20,000 and £23,000 not including expenses.