Rye leases on domestic properties are gradually losing value. if your lease has about ninety years unexpired, you should start considering the need for a lease extension. If lease term is less than eighty years, you will then be required to pay half of the property's 'marriage value' on top of the standard cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Leasehold owners in Rye will usually qualify for a lease extension; however It would be wise to check with a lawyer to check if you qualify. In some cases you may not qualify. There are also strict deadlines and procedures to comply with once the process has started so it’s prudent to be guided by a conveyancer during the process.
Leasehold properties in Rye with over 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you enhanced control over the value of your Rye leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last Spring Henry, started to get near to the eighty-year mark with the lease on his garden flat in Rye. Having bought his home 19 years ago, the length of the lease was of little bearing. Fortunately, he became aware that he needed to take steps soon on a lease extension. Henry was able to extend his lease just under the wire in January. Henry and the landlord who owned the flat above subsequently settled on sum of £6,000 . If the lease had descended lower than 80 years, the price would have become more exhorbitant by at least £1,050.
Mr K Thomas owned a studio flat in Rye in August 2010. We are asked if we could shed any light on how much (approximately) premium could be to extend the lease by 90 years. Identical homes in Rye with an extended lease were valued about £233,200. The average amount of ground rent was £60 billed yearly. The lease termination date was in 2086. Given that there were 61 years as a residual term we estimated the premium to the landlord to extend the lease to be between £22,800 and £26,400 exclusive of fees.
In 2011 we were phoned by Mr and Mrs. I James who, having bought a purpose-built flat in Rye in March 2009. The question was if we could shed any light on how much (roughly) price would likely be for a 90 year lease extension. Comparable residencies in Rye with 100 year plus lease were valued about £166,800. The mid-range amount of ground rent was £50 collected monthly. The lease concluded on 2 May 2075. Considering the 50 years unexpired we calculated the compensation to the landlord to extend the lease to be within £32,300 and £37,400 plus costs.