It’s an underpublicised certainty that a Rye residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Rye property market.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If lease term slips under eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Rye will be able to extend under the legislation; however a lawyer should be able to clarify if you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer from beginning to end of the formalities.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| Chelsea 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers 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.
Last year Theo, came dangerously near to the eighty-year threshold with the lease on his one bedroom apartment in Rye. In buying his home 18 years previously, the lease term was of little concern. by good luck, he recognised he would imminently be paying an inflated amount for a lease extension. Theo was able to extend his lease at the eleventh hour in September. Theo and the landlord subsequently settled on an amount of £5,000 . If he not met the deadline, the price would have escalated by at least £1,125.
Dr Jayden Bertrand purchased a one bedroom apartment in Rye in February 2009. The question was if we could estimate the price would be for a 90 year extension to my lease. Comparable residencies in Rye with 100 year plus lease were valued around £295,000. The mid-range amount of ground rent was £50 billed monthly. The lease concluded on 15 July 2101. Having 75 years as a residual term we approximated the premium to the landlord to extend the lease to be between £8,600 and £9,800 not including professional charges.
In 2013 we were approached by Mr and Mrs. V Harris who, having completed a purpose-built flat in Rye in July 2002. The dilemma was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Identical homes in Rye with a long lease were in the region of £250,400. The average ground rent payable was £65 billed yearly. The lease ran out on 18 May 2090. Taking into account 64 years left we approximated the compensation to the freeholder for the lease extension to be within £19,000 and £22,000 exclusive of expenses.