The market value of a leasehold property in Rye is impacted by how long the lease has left to run. If it is near to or less than eighty years you should expect problems on re-sale, so it is recommended to arrange for a lease extension prior to purchasing. Ideally one should start the process of extending the lease is when the lease still has 82 years unexpired so that a lease extension can be addressed well before the 80 year cut off point. Statute entitles Rye qualifying lessees to a ninety year extension added to their unexpired lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | |
| Barnsley Building Society | |
| Birmingham Midshires | |
| Leeds Building Society | |
| Skipton Building Society |
The conveyancing solicitors that we work with procure 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 lawyer we work with provide it.
In the wake of 6 months of unsuccessful negotiations with the landlord of her ground floor apartment in Rye, Rhiannon commenced the lease extension process as the 80 year deadline was rapidly advancing. The legal work was finalised in August 2015. The landlord’s fees were kept to an absolute minimum.
Last month we were e-mailed by Mr Ali Kelly , who was assigned a lease of a first floor apartment in Rye in November 2009. We are asked if we could shed any light on how much (approximately) price could be to extend the lease by a further 90 years. Comparative premises in Rye with a long lease were valued around £257,800. The average amount of ground rent was £65 collected annually. The lease lapsed on 11 May 2091. Having 65 years left we approximated the premium to the landlord for the lease extension to be within £18,100 and £20,800 not including fees.
In 2012 we were e-mailed by Mr and Mrs. R Rivera who, having moved into a one bedroom flat in Rye in June 1999. The question was if we could estimate the premium would be to prolong the lease by 90 years. Comparable properties in Rye with an extended lease were in the region of £191,400. The mid-range ground rent payable was £55 billed monthly. The lease ran out in 2080. Taking into account 54 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £34,200 and £39,600 plus fees.