Rowen residential property owned on a long lease is a wasting asset as the leaseholder merely owns the property for a set term.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with undertake 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 lawyer we work with provide it.
Sam owned a conversion apartment in Rowen on the market with a lease of fraction over sixty years outstanding. Sam informally contacted his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Sam to invoke his statutory right. Sam procured expert advice and was able to make a more informed decision and deal with the matter and sell the flat.
Dr Natasha Alexander bought a one bedroom apartment in Rowen in April 2004. The dilemma was if we could estimate the compensation to the landlord would be to extend the lease by a further 90 years. Comparable flats in Rowen with a long lease were in the region of £275,000. The mid-range ground rent payable was £45 billed monthly. The lease ran out in 2095. Taking into account 69 years unexpired we approximated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 exclusive of fees.
In 2012 we were approached by Mr and Mrs. U Young who, having owned a basement apartment in Rowen in September 2012. The dilemma was if we could estimate the price would be to prolong the lease by an additional years. Comparable homes in Rowen with an extended lease were valued around £216,000. The mid-range amount of ground rent was £60 billed every twelve months. The lease expired on 12 November 2084. Given that there were 58 years remaining we calculated the premium to the freeholder to extend the lease to be between £28,500 and £33,000 plus legals.