When it comes to long leasehold premises in Newton Aycliffe, you are actually buying a right to reside in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately greater particularly when there are fewer than 80 years remaining. Residents in Newton Aycliffe with a lease approaching 81 years remaining should seriously consider extending it as soon as possible. When the lease term has under 80 years left, under the current statute the landlord can calculate and demand a larger premium, based on a technical calculation, strangely termed as “marriage value” which is due.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 Newton Aycliffe,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 in-depth market knowledge and the close ties they enjoy with Newton Aycliffe valuers.
Half a year ago Sam, started to get near to the 80-year threshold with the lease on his one bedroom flat in Newton Aycliffe. Having purchased his property two decades ago, the length of the lease was of little concern. Thankfully, he became aware that he needed to take action soon on Extending the lease. Sam was able to extend his lease at the eleventh hour in July. Sam and the freeholder eventually settled on an amount of £5,000 . If the lease had gone to less than eighty years, the premium would have escalated by a minimum £1,075.
In 2009 we were approached by Dr Naomi Leroy who, having bought a garden apartment in Newton Aycliffe in August 1998. The question was if we could estimate the price would be for a ninety year lease extension. Similar flats in Newton Aycliffe with 100 year plus lease were valued around £290,000. The mid-range ground rent payable was £45 collected annually. The lease finished in 2097. Considering the 73 years as a residual term we approximated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 plus fees.
In 2010 we were contacted by Mr and Mrs. K Edwards who, having owned a one bedroom flat in Newton Aycliffe in April 1996. We are asked if we could approximate the price could be to extend the lease by 90 years. Similar flats in Newton Aycliffe with a long lease were worth £240,600. The average amount of ground rent was £60 invoiced per annum. The lease elapsed in 2086. Considering the 62 years remaining we approximated the compensation to the freeholder to extend the lease to be between £21,900 and £25,200 plus expenses.