The market value of a leasehold property in Raglan is impacted by how many years the lease has remaining. If it is close to or less than 80 years you should envisage problems on re-sale, so it is advisable to arrange for the lease to be extended prior to buying. It is preferable to commence the process of extending the lease is when the lease still has 82 years remaining so that formalities can be addressed in advance of the eighty year cut off point. Leasehold Reform legislation enables Raglan qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus a supplemental term of 90 years. The purpose of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold residencies in Raglan with more than 100 years remaining on the lease are often 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 upside in buying the reversionary interest unless savings on ground rent and estate charges justify it.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 lawyers that we work with handle Raglan 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 conveyancer we work with provide it.
After unsuccessful correspondence with the landlord of her one bedroom apartment in Raglan, Jennifer commenced the lease extension process just as the lease was coming close to the crucial 80-year mark. The transaction was concluded in August 2005. The freeholder’s costs were kept to an absolute minimum.
Last Summer we were phoned by Dr N Watson , who acquired a newly refurbished flat in Raglan in June 2005. The dilemma was if we could approximate the premium would likely be to extend the lease by 90 years. Similar flats in Raglan with 100 year plus lease were worth £265,000. The mid-range ground rent payable was £50 billed annually. The lease ended on 13 March 2100. Considering the 74 years left we calculated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of fees.
In 2012 we were e-mailed by Ms Lucy Rogers who, having bought a garden apartment in Raglan in October 1998. The dilemma was if we could approximate the price would be for a ninety year lease extension. Identical residencies in Raglan with 100 year plus lease were worth £166,400. The average amount of ground rent was £60 billed monthly. The lease came to a finish on 16 August 2080. Given that there were 54 years outstanding we calculated the compensation to the landlord to extend the lease to be within £32,300 and £37,400 not including costs.