The re-sale value of a leasehold property in Newtown depends on how many years the lease has remaining. If it is close to or fewer than 80 years you should expect difficulties on re-sale, so it is advisable to arrange for a lease extension ahead of buying. It is preferable to start the lease extension process when a lease still has 82 years unexpired so that formalities can be concluded well before the eighty year cut off point. Statute entitles Newtown qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus an additional term of ninety years. The intention of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold premises in Newtown with more than 100 years left on the lease are sometimes regarded as a ‘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 upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Chelsea Building Society | 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire Building Society | 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. |
Lease extensions in Newtown can be a difficult process. We recommend you obtain guidance from a conveyancing solicitor 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 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.
Lucas owned a studio apartment in Newtown on the market with a lease of a few days over 61 years outstanding. Lucas informally spoke with his freeholder being a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Lucas to exercise his statutory right. Lucas obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and sell the property.
In 2013 we were e-mailed by Mrs H Richardson who, having moved into a basement apartment in Newtown in September 1997. We are asked if we could approximate the compensation to the landlord could be for a 90 year lease extension. Identical homes in Newtown with a long lease were in the region of £235,600. The average amount of ground rent was £60 collected every twelve months. The lease elapsed on 21 March 2088. Given that there were 62 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £21,900 and £25,200 not including legals.
Mr D Garcia bought a purpose-built apartment in Newtown in June 2005. The dilemma was if we could shed any light on how much (roughly) price would be for a ninety year extension to my lease. Similar flats in Newtown with 100 year plus lease were valued around £174,200. The average amount of ground rent was £55 billed quarterly. The lease ran out on 8 July 2077. Taking into account 51 years left we calculated the premium to the freeholder to extend the lease to be within £31,400 and £36,200 not including professional charges.