Newtown leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Legislation has been in place for sometime now which entitles qualifying Newtown residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Newtown you would be well advised to check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
It is generally accepted that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | 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. |
| Leeds Building Society | 85 years remaining from the start 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 |
| 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 procure professional help from a conveyancer and valuer with experience in lease extensions.
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 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.
Stanley was the the leasehold owner of a high value flat in Newtown on the market with a lease of a few days over 59 years outstanding. Stanley on an informal basis spoke with his freeholder being a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Stanley to exercise his statutory right. Stanley procured expert advice and was able to make a more informed judgement and deal with the matter and readily saleable.
Mr N Moreau owned a one bedroom apartment in Newtown in January 2008. The dilemma was if we could approximate the premium would likely be for a ninety year lease extension. Comparative homes in Newtown with 100 year plus lease were worth £210,000. The average ground rent payable was £50 billed per annum. The lease end date was in 2106. Having 80 years left we approximated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 plus legals.
In 2010 we were approached by Dr A Carter who, having was assigned a lease of a purpose-built apartment in Newtown in January 2007. The question was if we could estimate the price would be for a 90 year extension to my lease. Identical residencies in Newtown with a long lease were valued about £280,000. The average amount of ground rent was £45 collected annually. The lease elapsed in 2096. Having 70 years unexpired we approximated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 not including costs.