The nearer a domestic lease in Rye nears to zero years unexpired, the the greater the reduction in the value of the property. Where the lease has, in excess of 125 years to run then this decrease may be fractional nevertheless there will become a point in time when a lease has fewer than eighty years unexpired as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the primary rational as to why you should extend the lease sooner rather than later. Most flat owners in Rye will meet the qualifying criteria; however a conveyancer will be able to advise whether you are eligible for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is generally accepted that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 45 years left, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
Engaging our service gives you increased control over the value of your Rye leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Jonathan, started to get close to the eighty-year threshold with the lease on his basement apartment in Rye. In buying his flat two decades ago, the unexpired term was of minimal relevance. Fortunately, he realised he needed to take steps soon on Extending the lease. Jonathan arranged for a lease extension just ahead of time last January. Jonathan and the landlord in the end agreed on a premium of £5,500 . If the lease had slipped to less than 80 years, the figure would have increased by a minimum £1,050.
Last Spring we were called by Mr and Mrs. N Bertrand , who acquired a one bedroom flat in Rye in March 2010. The dilemma was if we could shed any light on how much (roughly) price would be to extend the lease by 90 years. Identical premises in Rye with an extended lease were in the region of £200,000. The average ground rent payable was £50 invoiced yearly. The lease ran out in 2103. Taking into account 77 years remaining we calculated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 plus legals.
Mr and Mrs. D Leroy owned a basement apartment in Rye in October 1997. The question was if we could shed any light on how much (approximately) price would be to prolong the lease by ninety years. Comparable premises in Rye with an extended lease were worth £260,200. The mid-range ground rent payable was £65 billed annually. The lease elapsed in 2092. Given that there were 66 years unexpired we approximated the premium to the freeholder for the lease extension to be within £15,200 and £17,600 plus professional charges.