Unfortunately that a Newington residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Newington property market.Where your lease has approximately 90 years left, you should start considering a lease extension. If lease term falls under eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most flat owners in Newington will be able to extend under the legislation; however a lawyer should be able to confirm whether you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your conveyancer throughout the formalities.
Leasehold properties in Newington with more than 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| 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. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Newington,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Newington valuers.
Last Spring Benjamin, came seriously close to the 80-year threshold with the lease on his studio apartment in Newington. In buying his flat 18 years previously, the unexpired term was of no relevance. Thankfully, he realised he needed to take action soon on Extending the lease. Benjamin arranged for a lease extension just under the wire in August. Benjamin and the landlord who owned the flat above subsequently settled on sum of £5,000 . If he failed to meet the deadline, the sum would have become more costly by a minimum £1,125.
Mr and Mrs. I Hernández owned a newly refurbished apartment in Newington in May 1996. We are asked if we could shed any light on how much (roughly) premium would likely be for a 90 year lease extension. Identical residencies in Newington with 100 year plus lease were worth £198,800. The mid-range amount of ground rent was £55 billed every twelve months. The lease concluded in 2080. Taking into account 55 years outstanding we calculated the compensation to the landlord for the lease extension to be within £33,300 and £38,400 not including expenses.
An example of a Freehold Enfranchisement case 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 was in relation to 41 flats. The unexpired residue of the current lease was 107 years.