Raglan leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Raglan tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Raglan you should check if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Raglan with in excess of 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 procure 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 lawyer we work with provide it.
During the course of the last few months Felix, came perilously close to the eighty-year mark with the lease on his one bedroom apartment in Raglan. Having purchased his property 19 years previously, the length of the lease was of no relevance. by good luck, he recognised he would soon be paying an inflated amount for Extending the lease. Felix extended the lease just under the wire in August. Felix and the freeholder via the management company ultimately agreed on an amount of £6,000 . If he not met the deadline, the price would have become more costly by a minimum £1,000.
Mr and Mrs. B Rose purchased a purpose-built apartment in Raglan in March 1995. The question was if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year extension to my lease. Comparative residencies in Raglan with an extended lease were in the region of £186,000. The mid-range ground rent payable was £65 collected quarterly. The lease came to a finish on 15 June 2083. Taking into account 58 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £24,700 and £28,600 exclusive of legals.
In 2011 we were contacted by Dr I Leroy who, having purchased a studio apartment in Raglan in May 1997. We are asked if we could shed any light on how much (approximately) price could be for a ninety year lease extension. Comparable flats in Raglan with 100 year plus lease were in the region of £250,000. The mid-range amount of ground rent was £50 invoiced monthly. The lease came to a finish on 14 September 2094. Given that there were 69 years unexpired we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus costs.