As the length of the unexpired term of a Rainham residential lease decreases so does its value and therefore the value of your property. If the residual term has, beyond one hundred years remaining then this decrease may be negligible however there will become a point in time when a lease has fewer than 80 years remaining as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary rational as to why you should extend the lease sooner as opposed to later. Most flat owners in Rainham will qualify for this right; however a conveyancer will be able to confirm whether you are eligible for a lease extension. In certain situations you may not qualify, the most common reason being that you have owned the property for under two years.
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 many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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 conveyancers that we work with procure Rainham 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 the wake of 9 months of lengthy discussions with the landlord of her ground floor apartment in Rainham, Naomi initiated the lease extension process as the 80 year mark was quickly advancing. The transaction completed in October 2013. The landlord’s charges were negotiated to approximately 600 GBP.
Last month we were phoned by Mr and Mrs. B Young , who moved into a first floor flat in Rainham in September 2010. We are asked if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Similar flats in Rainham with 100 year plus lease were in the region of £250,000. The average ground rent payable was £50 invoiced per annum. The lease lapsed in 2092. Taking into account 68 years unexpired we estimated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 not including expenses.
An example of a Lease Extension decision for a Rainham property is 37 Lodge Court High Street in November 2013. the decision of the LVT was that the premium to be paid for the new lease was £25,559 This case related to 1 flat. The unexpired lease term was 57.5 years.