Owning a apartment usually means owning a lease of the property, which has a set term of years. The lease will ordinarily be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Rayners Lane. Clearly, the length of lease left shortens as time goes by. This is often overlooked and only raises itself as an issue when the flat or house needs to be disposed of or refinanced. The shorter the lease the lower the value of the property and the more it will cost to extend the lease. Qualifying long lease owners in Rayners Lane have the legal entitlement to extend the lease for an additional ninety years in accordance with the 1993 Leasehold Reform Act. Do give careful attention before putting off your Rayners Lane lease extension. Holding off that expense now simply increases the price you will ultimately have to pay to extend your lease
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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 conveyancing solicitor we work with provide it.
Luke owned a studio apartment in Rayners Lane on the market with a lease of fraction over 72 years remaining. Luke on an informal basis approached his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Luke to invoke his statutory right. Luke obtained expert advice and was able to make a more informed judgement and handle with the matter and sell the flat.
Last Christmas we were contacted by Ms Louise Vincent , who bought a garden apartment in Rayners Lane in September 2005. We are asked if we could estimate the price would likely be to extend the lease by 90 years. Identical flats in Rayners Lane with 100 year plus lease were in the region of £181,600. The mid-range amount of ground rent was £55 collected annually. The lease ended in 2077. Considering the 52 years remaining we calculated the compensation to the freeholder to extend the lease to be between £30,400 and £35,200 plus professional charges.
An example of a Lease Extension matter before the tribunal for a Rayners Lane property 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 term was 79 years.