Unfortunately that a Rye 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 early years due to the reduction being disguised by increases in the Rye property prices.Where your lease has approximately 90 years left, you need to start thinking about 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 under eighty years - otherwise a higher premium will be due. The majority of flat owners in Rye will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
Leasehold premises in Rye with in excess of 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and maintenance charges warrant it.
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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 |
Using our service will provide you increased control over the value of your Rye leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Reuben was the the leasehold owner of a studio apartment in Rye on the market with a lease of a little over 61 years outstanding. Reuben on an informal basis spoke with his freeholder being a well known London-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 per annum. No ground rent would be payable on a lease extension were Reuben to invoke his statutory right. Reuben obtained expert advice and secured an acceptable resolution without resorting to tribunal and readily saleable.
In 2014 we were contacted by Mr W Martinez who, having acquired a purpose-built flat in Rye in November 2010. The dilemma was if we could shed any light on how much (approximately) price would be to extend the lease by a further 90 years. Identical properties in Rye with an extended lease were valued about £191,400. The average ground rent payable was £55 billed every twelve months. The lease ended in 2078. Taking into account 54 years remaining we estimated the compensation to the freeholder to extend the lease to be between £34,200 and £39,600 exclusive of professional charges.
Mr James Evans owned a newly refurbished flat in Rye in October 2002. The question was if we could estimate the premium would likely be for a ninety year extension to my lease. Comparable flats in Rye with an extended lease were in the region of £295,000. The average amount of ground rent was £45 collected quarterly. The lease finished on 1 October 2098. Considering the 74 years outstanding we estimated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 not including costs.