Rayleigh leases on residential properties are gradually losing value. Where your lease has approximately 90 years unexpired, you should start thinking about a lease extension. If lease term dips under eighty years, you will then have to pay half of the property's 'marriage value' in addition to the standard cost of the lease extension to your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Leasehold owners in Rayleigh will usually be legally entitled to a lease extension; however It would be wise to check with a lawyer to confirm if you qualify. In certain cases you may not qualify. There are prescribed timetables and procedures to follow once the process is initiated so it’s best to be guided by a conveyancing solicitor during the process.
Leasehold properties in Rayleigh with over 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Lloyds TSB Scotland | 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. |
The conveyancers that we work with procure Rayleigh 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.
Off the back of protracted negotiations with the landlord of her basement apartment in Rayleigh, Caitlin commenced the lease extension process as the 80 year deadline was rapidly nearing. The legal work was concluded in January 2010. The landlord’s charges were negotiated to a tad over six hundred pounds.
Last year we were approach by Mrs Caitlin Laurent , who owned a one bedroom flat in Rayleigh in June 2004. The dilemma was if we could shed any light on how much (approximately) premium would be for a 90 year extension to my lease. Comparative properties in Rayleigh with an extended lease were valued about £250,400. The mid-range amount of ground rent was £65 collected annually. The lease elapsed on 21 July 2088. Having 64 years remaining we approximated the premium to the landlord for the lease extension to be within £19,000 and £22,000 exclusive of legals.
In 2012 we were called by Mr Leo Pérez who, having purchased a first floor flat in Rayleigh in August 1997. The question was if we could estimate the price would likely be to prolong the lease by a further 90 years. Similar premises in Rayleigh with an extended lease were valued around £189,000. The mid-range ground rent payable was £55 collected quarterly. The lease elapsed on 17 February 2077. Having 53 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £28,500 and £33,000 not including legals.