Owning a flat usually means owning a lease of the property, which has a set term of years. The lease will normally be granted for a prescribed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Raunds. Clearly, the length of lease remaining shortens over time. This may pass by relatively unnoticed when the property needs to be disposed of or refinanced. The shorter the lease the less it is worth and the more expensive it will be to extend the lease. Qualifying long lease owners in Raunds have the right to extend the lease for an additional 90 years under Leasehold Reform legislation. Do give due deliberation before putting off your Raunds lease extension. Holding off that expense now simply increases the price you will eventually incur to extend your lease
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the same 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service gives you better control over the value of your Raunds leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 George, started to get close to the eighty-year threshold with the lease on his first floor apartment in Raunds. In buying his home two decades ago, the unexpired term was of little importance. Fortunately, he recognised he would soon be paying an inflated amount for Extending the lease. George arranged for a lease extension just under the wire in July. George and the landlord who owned the flat above eventually settled on an amount of £6,000 . If the lease had slid lower than 80 years, the premium would have gone up by at least £1,100.
In 2013 we were phoned by Dr Andrew Nguyen who, having purchased a purpose-built apartment in Raunds in October 1995. The question was if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by ninety years. Comparative residencies in Raunds with a long lease were worth £275,000. The average amount of ground rent was £65 collected every twelve months. The lease lapsed on 8 April 2094. Having 68 years remaining we approximated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 plus expenses.
In 2012 we were called by Mr T David who, having acquired a one bedroom apartment in Raunds in May 2005. The question was if we could approximate the price would be to prolong the lease by 90 years. Similar properties in Raunds with an extended lease were worth £208,600. The mid-range ground rent payable was £60 collected quarterly. The lease lapsed on 14 May 2083. Having 57 years remaining we calculated the premium to the freeholder to extend the lease to be within £30,400 and £35,200 plus fees.