Unfortunately that a Rowen residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Rowen property prices.Once your lease nears 85ish years, you need to 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 falls below eighty years - otherwise a higher premium will be due. The majority of leasehold owners in Rowen will be able to extend under the legislation; however a conveyancer will be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your lawyer throughout the formalities.
It is generally considered that a residential leasehold with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
Using our service gives you increased control over the value of your Rowen leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Luke, came very close to the 80-year mark with the lease on his two bedroom apartment in Rowen. Having purchased his flat two decades ago, the length of the lease was of no significance. by good luck, it dawned on him that he needed to take action soon on a lease extension. Luke arranged for a lease extension just ahead of time last May. Luke and the landlord subsequently settled on a premium of £6,000 . If he not met the deadline, the amount would have become more costly by a minimum £1,000.
Ms Megan Michel was assigned a lease of a purpose-built apartment in Rowen in October 1997. We are asked if we could approximate the price would likely be to extend the lease by an additional years. Comparable properties in Rowen with an extended lease were worth £216,000. The average ground rent payable was £60 invoiced per annum. The lease concluded on 24 March 2083. Taking into account 58 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £28,500 and £33,000 not including professional charges.
In 2009 we were e-mailed by Mr Arthur Anderson who, having bought a one bedroom apartment in Rowen in November 2007. We are asked if we could approximate the premium would likely be for a ninety year extension to my lease. Similar flats in Rowen with 100 year plus lease were valued about £205,000. The average amount of ground rent was £50 billed annually. The lease expired in 2103. Taking into account 78 years remaining we estimated the compensation to the landlord to extend the lease to be between £7,600 and £8,800 exclusive of costs.