Unfortunately that a Rayners Lane residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Rayners Lane property market.Where your lease has approximately 90 years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips lower than eighty years - otherwise a higher amount will be due. The majority of flat owners in Rayners Lane will be able to extend under the legislation; however a lawyer should be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor for the duration of the process.
Leasehold properties in Rayners Lane with more than 100 years left on the lease are sometimes regarded as a ‘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 freehold unless savings on ground rent and estate charges merit it.
| 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; |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
The lawyers 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 conveyancer we work with provide it.
Last year Milo, started to get close to the 80-year threshold with the lease on his two bedroom apartment in Rayners Lane. Having bought his home two decades ago, the unexpired term was of no concern. Fortunately, it dawned on him that he would imminently be paying an inflated amount for a lease extension. Milo was able to extend his lease just under the wire in August. Milo and the freeholder via the management company eventually agreed on the final figure of £5,000 . If he had missed the deadline, the amount would have gone up by at least £875.
In 2010 we were approached by Ms Y Fournier who, having moved into a garden flat in Rayners Lane in July 1995. We are asked if we could shed any light on how much (approximately) premium could be for a ninety year lease extension. Identical homes in Rayners Lane with 100 year plus lease were in the region of £198,800. The mid-range ground rent payable was £55 collected every twelve months. The lease lapsed on 4 March 2080. Taking into account 55 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £33,300 and £38,400 exclusive of costs.
An example of a Lease Extension matter before the tribunal for a Rayners Lane residence 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 related to 1 flat. The unexpired residue of the current lease was 79 years.