When it comes to residential leasehold property in Rainham, you effectively rent it for a certain amount of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should consider a lease extension sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly especially when there are fewer than eighty years remaining. Leasehold owners in Rainham with a lease nearing 81 years left should seriously think of extending it without delay. When the lease term has below eighty years left, under the current Act the freeholder is entitled to calculate and levy a larger amount, assessed on a technical multiplication, strangely termed as “marriage value” which is payable.
Leasehold properties in Rainham with more than 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Rainham,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Rainham valuers.
During the course of the last few months Hunter, came critically close to the 80-year mark with the lease on his first floor apartment in Rainham. Having bought his property 18 years ago, the length of the lease was of minimal importance. Thankfully, he became aware that he would imminently be paying an escalated premium for a lease extension. Hunter was able to extend his lease just in the nick of time last May. Hunter and the landlord who owned the flat above eventually settled on an amount of £5,000 . If the lease had slipped to less than 80 years, the premium would have escalated by at least £1,100.
In 2013 we were called by Dr T Laurent who, having acquired a studio flat in Rainham in March 2011. The dilemma was if we could estimate the premium would be for a ninety year extension to my lease. Identical residencies in Rainham with 100 year plus lease were worth £193,400. The average ground rent payable was £65 collected monthly. The lease ended in 2084. Taking into account 59 years outstanding we calculated the compensation to the landlord to extend the lease to be within £21,900 and £25,200 exclusive of expenses.
An example of a Lease Extension case for a Rainham premises 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 term was 57.5 years.