Unfortunately that a Rowen residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Rowen property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. If lease term slips under eighty years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of flat owners in Rowen will be able to extend under the legislation; however a conveyancer will be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is generally accepted that a residential leasehold with over 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 35 years left, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with procure Rowen 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.
During the course of the last few months Jacob, came precariously close to the eighty-year threshold with the lease on his first floor apartment in Rowen. Having purchased his flat two decades ago, the unexpired term was of little significance. Luckily, he noticed he would soon be paying an inflated amount for Extending the lease. Jacob was able to extend his lease just ahead of time in April. Jacob and the freeholder via the managing agents eventually agreed on the final figure of £5,500 . If he had missed the deadline, the premium would have increased by at least £850.
Mr Owen Walker moved into a ground floor flat in Rowen in June 2012. The dilemma was if we could estimate the compensation to the landlord would likely be to extend the lease by an additional years. Comparable properties in Rowen with 100 year plus lease were worth £200,000. The mid-range ground rent payable was £50 collected every twelve months. The lease expiry date was on 5 March 2103. Having 77 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 plus expenses.
Dr A Martinez purchased a first floor apartment in Rowen in April 2005. We are asked if we could shed any light on how much (approximately) premium could be for a 90 year extension to my lease. Comparative residencies in Rowen with an extended lease were worth £260,200. The average ground rent payable was £65 collected per annum. The lease expired on 19 October 2092. Considering the 66 years remaining we calculated the premium to the landlord to extend the lease to be within £16,200 and £18,600 exclusive of expenses.