Rye leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. The majority of owners of residential leasehold property in Rye enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Rye you must investigate if your lease has between seventy and ninety years left. There are good reasons why a Rye leaseholder with a lease having around 80 years unexpired should take action to ensure that a lease extension is actioned without delay
Leasehold premises in Rye with in excess of 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | 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 |
| 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. |
The conveyancing solicitors that we work with handle Rye 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 conveyancing solicitor we work with provide it.
In recent months Omar, came critically close to the eighty-year threshold with the lease on his basement flat in Rye. In buying his flat 19 years previously, the unexpired term was of little relevance. Luckily, he became aware that he would imminently be paying an escalated premium for a lease extension. Omar extended the lease at the eleventh hour in January. Omar and the landlord eventually settled on a premium of £5,500 . If he not met the deadline, the figure would have escalated by at least £1,100.
Last Christmas we were e-mailed by Mr and Mrs. S Brooks , who moved into a one bedroom apartment in Rye in August 2006. We are asked if we could shed any light on how much (roughly) premium would likely be to extend the lease by a further 90 years. Comparative properties in Rye with a long lease were in the region of £275,000. The average ground rent payable was £65 billed monthly. The lease lapsed on 8 March 2094. Given that there were 68 years remaining we approximated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 exclusive of legals.
In 2012 we were e-mailed by Mr and Mrs. P Parker who, having moved into a purpose-built apartment in Rye in November 1998. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by ninety years. Identical homes in Rye with a long lease were worth £208,600. The average ground rent payable was £60 collected per annum. The lease finished in 2083. Considering the 57 years left we estimated the premium to the landlord to extend the lease to be between £30,400 and £35,200 exclusive of expenses.