The re-sale value of a leasehold property in Rayners Lane is impacted by how many years the lease has left to run. If it is close to or less than 80 years you should envisage problems on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. It is preferable to start the lease extension process when the lease still has 82 years unexpired so that formalities can be finalised prior to the 80 year cut off point. Statute enables Rayners Lane qualifying lessees to a ninety year extension added to their residual lease term (ie if your lease has fifty years left the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold residencies in Rayners Lane with in excess of 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with handle Rayners Lane 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 conveyancing solicitor we work with provide it.
After lengthy discussions with the landlord of her first floor apartment in Rayners Lane, Paige commenced the lease extension process just as her lease was approaching the all-important eighty-year mark. The legal work was concluded in June 2009. The freeholder’s charges were negotiated to about 700 GBP.
Last April we were approach by Mrs Chloe Parker , who bought a one bedroom flat in Rayners Lane in October 1998. The question was if we could shed any light on how much (approximately) price could be to extend the lease by an additional years. Comparable residencies in Rayners Lane with 100 year plus lease were in the region of £210,000. The average amount of ground rent was £50 collected per annum. The lease ended in 2106. Given that there were 80 years as a residual term we calculated the premium to the landlord to extend the lease to be within £8,600 and £9,800 not including fees.
An example of a Lease Extension case for a Rayners Lane premises is GFF 1 Holyrood Avenue in May 2014. The Tenant wished to acquire a new (extended) lease and applied to the Willesden County Court who granted a vesting order on 20* March2013. The Tribunal decied that the premium to be paid was £9,062 This case was in relation to 1 flat. The unexpired term as at the valuation date was 79 years.