The market value of Newhaven leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can increase materialy once the remaining term is less than eighty years
It is generally considered that a property with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with procure Newhaven 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 lawyer we work with provide it.
In 2014 Kyle, came perilously near to the 80-year threshold with the lease on his basement apartment in Newhaven. Having purchased his property two decades ago, the unexpired term was of little relevance. by good luck, he realised he would imminently be paying an escalated premium for Extending the lease. Kyle extended the lease just ahead of time in May. Kyle and the freeholder via the management company subsequently agreed on the final figure of £5,000 . If the lease had slid lower than 80 years, the figure would have gone up by at least £1,150.
Mr and Mrs. R Clarke was assigned a lease of a basement flat in Newhaven in July 1996. The dilemma was if we could approximate the price could be for a 90 year lease extension. Identical residencies in Newhaven with a long lease were valued about £235,200. The average ground rent payable was £45 collected monthly. The lease ended in 2091. Given that there were 66 years remaining we approximated the premium to the landlord to extend the lease to be between £12,400 and £14,200 exclusive of costs.
In 2012 we were e-mailed by Dr W Cook who, having purchased a first floor flat in Newhaven in February 2009. We are asked if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Identical properties in Newhaven with 100 year plus lease were valued around £275,000. The average ground rent payable was £55 collected per annum. The lease concluded in 2102. Taking into account 77 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 exclusive of costs.