Why you should commence your Newtown lease extension

Top reasons for lease extension now:

A Newtown lease depreciates with the years remaining on the lease.

Unfortunately that a Newtown residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Newtown property prices.Where your lease has approximately ninety years left, you need to 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 dips lower than 80 years - otherwise a higher premium will be payable. The majority of leasehold owners in Newtown will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you are eligibility. In some situations 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 process.

Newtown property with a lease extension has roughly the same value as a freehold

Leasehold premises in Newtown with in excess of one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges warrant it.

Banks and Building Societies may decide not to loan monies on a short lease

The trend since 2008 has been for lenders to tighten lending criteria across the board - this has extended to the property over which the mortgage is to be charged. This has resulted in the minimum number of years remaining under the lease required by lenders has increased. In the past lenders would grant a mortgage on a lease with twenty years plus the term of the loan - typically 50 year leases but those requirements are being increasingly undermined by the requirement for longer and longer leases - many use a minimum term of 75 years as standard.

Why use us for your lease extension in Newtown?

Engaging our service gives you better control over the value of your Newtown leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.

Newtown Lease Extension Case Summaries:

Freya, Newtown, Powys,

In the wake of eight months of unsuccessful discussions with the freeholder of her first floor flat in Newtown, Freya commenced the lease extension process as the 80 year deadline was fast nearing. The legal work was concluded in March 2009. The landlord’s fees were negotiated to slightly above 500 pounds.

Newtown case:

Mr and Mrs. Y Rose moved into a purpose-built apartment in Newtown in June 2005. The dilemma was if we could estimate the price would likely be to prolong the lease by an additional years. Comparative premises in Newtown with 100 year plus lease were valued around £198,800. The average ground rent payable was £55 billed every twelve months. The lease expired on 5 March 2081. Considering the 55 years left we approximated the premium to the landlord to extend the lease to be within £33,300 and £38,400 exclusive of expenses.

Newtown case:

Last year we were e-mailed by Mr W Bonnet , who owned a purpose-built apartment in Newtown in March 2001. We are asked if we could estimate the price could be to extend the lease by 90 years. Identical homes in Newtown with 100 year plus lease were worth £295,000. The mid-range ground rent payable was £45 billed quarterly. The lease finished in 2101. Having 75 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 not including legals.