Newington leases on domestic properties are gradually losing value. Where your lease has approximately 90 years unexpired, you should start considering the need for a lease extension. An important point to note is that it is financially advisable for the lease extension to take place before the term of the existing lease falls below 80 years - otherwise a higher premium will be payable. Flat owners in Newington will mostly qualify for a lease extension; however a solicitor will check your eligibility. In certain circumstances you may not be entitled. There are prescribed deadlines and formalities to comply with once the process has started so it’s prudent to be guided by a lawyer during the process.
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| 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. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service will provide you better control over the value of your Newington leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of eight months of lengthy correspondence with the freeholder of her purpose-built flat in Newington, Lily initiated the lease extension process as the 80 year mark was quickly approaching. The transaction completed in July 2010. The freeholder’s fees were kept to an absolute minimum.
In 2010 we were called by Mr and Mrs. K Turner who, having was assigned a lease of a basement apartment in Newington in May 2003. The dilemma was if we could estimate the price would be to extend the lease by an additional years. Comparative properties in Newington with 100 year plus lease were worth £166,800. The mid-range ground rent payable was £50 collected per annum. The lease ended on 17 May 2076. Given that there were 50 years remaining we estimated the premium to the freeholder for the lease extension to be within £32,300 and £37,400 not including legals.
An example of a Freehold Enfranchisement matter before the tribunal for a Newington residence is 1-41 Royal Tower Lodge 40 Cartwright Street in April 2013. the tribunal adding the agreed value of capitalised ground rents and the reversion the price to be paid for the freehold was £1,187,000 This case was in relation to 41 flats. The unexpired term as at the valuation date was 107 years.