As the length of the unexpired term of a Newtown domestic lease diminished so does its value and therefore the value of your property. Where the residual term has, over one hundred years to run then this decrease may be of little impact nevertheless there will become a point in time when a lease has fewer than 80 years remaining as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the main logic behind why you should consider extending without delay. Most flat owners in Newtown will meet the qualifying criteria; nevertheless a lawyer can confirm if you qualify to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
It is generally considered 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 90 years added to any lease with more than 30 years left, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with handle Newtown lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Off the back of lengthy discussions with the landlord of her purpose-built apartment in Newtown, Melissa started the lease extension process as the eighty year deadline was fast advancing. The legal work completed in November 2013. The landlord’s fees were kept to an absolute minimum.
Mr and Mrs. E André moved into a newly refurbished flat in Newtown in April 1999. We are asked if we could shed any light on how much (approximately) premium would likely be to prolong the lease by ninety years. Comparative flats in Newtown with a long lease were worth £206,200. The average ground rent payable was £60 collected monthly. The lease expired in 2081. Given that there were 56 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 plus costs.
In 2010 we were e-mailed by Mr U White who, having moved into a purpose-built flat in Newtown in March 2011. The dilemma was if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Identical flats in Newtown with 100 year plus lease were valued around £300,000. The average amount of ground rent was £50 invoiced per annum. The lease terminated in 2101. Having 76 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 not including professional charges.