The re-sale value of a leasehold property in Newbridge is impacted by how long the lease has left to run. If it is near to or fewer than eighty years you should anticipate difficulties on re-sale, so it is advisable to arrange for a lease extension ahead of buying. It is preferable to commence the process of extending the lease is when the lease still has 82 years to run so that formalities can be finalised in advance of the 80 year threshold. Current legislation entitles Newbridge qualifying lessees to an additional term of 90 years over and above the existing term, at a peppercorn rent (no ground rent). The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Newbridge with more than one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| 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 |
Using our service gives you enhanced control over the value of your Newbridge leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
16 months ago Leo, came very close to the eighty-year mark with the lease on his studio flat in Newbridge. Having bought his flat 18 years ago, the lease term was of little interest. As luck would have it, he realised he needed to take steps soon on a lease extension. Leo arranged for a lease extension just in the nick of time last May. Leo and the landlord ultimately settled on sum of £5,500 . If the lease had slipped below eighty years, the sum would have become more costly by a minimum £1,050.
Last March we were phoned by Mr J Mercier , who purchased a recently refurbished flat in Newbridge in May 1998. The dilemma was if we could shed any light on how much (approximately) premium could be to extend the lease by 90 years. Comparative residencies in Newbridge with a long lease were in the region of £242,600. The average amount of ground rent was £45 invoiced yearly. The lease elapsed on 5 February 2092. Taking into account 67 years outstanding we approximated the compensation to the landlord for the lease extension to be within £11,400 and £13,200 not including professional charges.
In 2012 we were approached by Mr and Mrs. A Edwards who, having owned a studio apartment in Newbridge in October 1998. 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 premises in Newbridge with an extended lease were valued around £280,000. The mid-range amount of ground rent was £55 billed per annum. The lease terminated in 2103. Considering the 78 years remaining we calculated the premium to the landlord to extend the lease to be within £13,300 and £15,400 exclusive of legals.