The nearer a residential lease in Newington gets to zero years unexpired, the more it reduces the value of the property. If the residual term has, more than 99 years to run then this decrease may be of little impact nevertheless there will become a point in time when a lease has fewer than 80 years remaining as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main logic behind why you should extend the lease sooner as opposed to later. Most flat owners in Newington will meet the qualifying criteria; however a conveyancing solicitor can advise whether you are eligible to extend your lease. In limited situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
It is generally accepted that a property with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 35 years unexpired, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 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. |
The conveyancers that we work with handle Newington 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.
Trailing protracted negotiations with the landlord of her garden apartment in Newington, Courtney started the lease extension process as the 80 year mark was quickly nearing. The legal work completed in August 2009. The freeholder’s costs were restricted to slightly above 700 pounds.
In 2011 we were e-mailed by Dr B Allen who, having bought a basement apartment in Newington in October 1997. The dilemma was if we could shed any light on how much (approximately) premium would likely be to extend the lease by a further 90 years. Similar residencies in Newington with 100 year plus lease were worth £181,600. The mid-range amount of ground rent was £55 collected yearly. The lease ended in 2078. Considering the 52 years remaining we approximated the compensation to the freeholder to extend the lease to be within £30,400 and £35,200 not including professional charges.
An example of a Freehold Enfranchisement decision for a Newington flat 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 related to 41 flats. The unexpired lease term was 107 years.