Newington leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Newington residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Newington you really ought to check if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold premises in Newington with over 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 landlord in Newington,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Newington valuers.
Lewis owned a 2 bedroom flat in Newington on the market with a lease of a few days over fifty eight years remaining. Lewis on an informal basis spoke with his landlord being a well known Bristol-based freehold company for a lease extension. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £100 annually. No ground rent would be payable on a lease extension were Lewis to invoke his statutory right. Lewis procured expert advice and was able to make a more informed decision and handle with the matter and readily saleable.
Dr V Rivera completed a one bedroom apartment in Newington in September 2006. The question was if we could shed any light on how much (roughly) premium could be for a ninety year lease extension. Similar homes in Newington with an extended lease were valued around £252,800. The mid-range ground rent payable was £65 billed every twelve months. The lease ended in 2090. Having 65 years left we estimated the compensation to the freeholder for the lease extension to be within £17,100 and £19,800 exclusive of 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 affected 41 flats. The unexpired term was 107 years.