Newquay leases on residential properties are gradually losing 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. The majority of owners of residential leasehold property in Newquay enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Newquay you really ought to check if your lease has between 70 and ninety years remaining. There are compelling reasons why a Newquay leaseholder with a lease having around 80 years remaining should take action to make sure that a lease extension is actioned without delay
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years left, the premises 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date 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. |
| 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. |
Retaining our service will provide you better control over the value of your Newquay leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Cameron owned a studio apartment in Newquay being sold with a lease of just over fifty eight years left. Cameron informally contacted his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £100 yearly. Ordinarily, ground rent would not be due on a lease extension were Cameron to invoke his statutory right. Cameron obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and sell the property.
Dr E François moved into a studio apartment in Newquay in October 2004. The question was if we could estimate the premium would be to extend the lease by ninety years. Comparative properties in Newquay with an extended lease were in the region of £285,000. The average amount of ground rent was £45 collected per annum. The lease terminated on 5 March 2097. Taking into account 72 years remaining we calculated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of fees.
Dr Jake Bennett acquired a one bedroom apartment in Newquay in September 1999. The question was if we could approximate the compensation to the landlord would be for a 90 year extension to my lease. Identical flats in Newquay with an extended lease were in the region of £233,200. The mid-range amount of ground rent was £60 collected quarterly. The lease concluded in 2086. Having 61 years remaining we calculated the compensation to the landlord for the lease extension to be within £22,800 and £26,400 plus costs.