When it comes to long leasehold premises in Newtown, you are in fact renting it for a certain amount of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately greater notably when there are fewer than eighty years left. Leasehold owners in Newtown with a lease approaching 81 years unexpired should seriously think of extending it as soon as possible. Once the lease term has fewer than 80 years remaining, under the relevant statute the landlord can calculate and charge a greater premium, based on a technical multiplication, known as “marriage value” which is payable.
It is generally accepted that a property with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 35 years unexpired, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| 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 procure guidance from a lawyer and surveyor 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 in-depth market knowledge 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.
Hugo owned a conversion flat in Newtown on the market with a lease of a few days over fifty eight years unexpired. Hugo on an informal basis contacted his landlord a well known London-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 to start with set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Hugo to invoke his statutory right. Hugo obtained expert legal guidance and secured satisfactory resolution without going to tribunal and sell the flat.
Ms Alisha Brown bought a ground floor flat in Newtown in January 2000. The dilemma was if we could approximate the premium could be for a ninety year lease extension. Similar residencies in Newtown with 100 year plus lease were valued around £248,000. The mid-range amount of ground rent was £65 billed annually. The lease ran out on 10 May 2088. Given that there were 63 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £20,900 and £24,200 plus costs.
In 2010 we were approached by Dr P Edwards who, having acquired a one bedroom flat in Newtown in January 1997. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Identical homes in Newtown with 100 year plus lease were worth £181,600. The average ground rent payable was £55 invoiced per annum. The lease concluded on 15 August 2077. Considering the 52 years left we estimated the compensation to the landlord to extend the lease to be within £30,400 and £35,200 plus costs.