Ravenglass leases on residential properties are gradually losing value. Where your lease has approximately ninety years left, you should start thinking about a lease extension. Eighty years is a significant number: when the unexpired term of a lease drops below this level then you begin incurring an additional element called marriage value. Leasehold owners in Ravenglass will usually qualify for a lease extension; however it’s a good idea to check with a lawyer to confirm if you qualify. In certain situations you may not be entitled. There are prescribed timetables and procedures to follow once the process has started so it’s prudent to be guided by a lawyer during the process.
Leasehold premises in Ravenglass with more than 100 years remaining on the lease are often 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 to be gained by buying the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Chelsea 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 undertake Ravenglass 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 protracted negotiations with the landlord of her one bedroom apartment in Ravenglass, Katherine commenced the lease extension process as the 80 year threshold was rapidly nearing. The transaction was finalised in September 2015. The freeholder’s costs were negotiated to less than 550 pounds.
In 2011 we were e-mailed by Dr Ella Díaz who, having purchased a one bedroom flat in Ravenglass in April 2002. The question was if we could approximate the price would be to extend the lease by an additional years. Comparative properties in Ravenglass with a long lease were worth £225,400. The mid-range ground rent payable was £45 invoiced per annum. The lease ended on 15 September 2089. Having 64 years outstanding we estimated the premium to the freeholder for the lease extension to be within £15,200 and £17,600 plus costs.
Dr M Reed acquired a one bedroom apartment in Ravenglass in March 2008. We are asked if we could approximate the price would be for a ninety year lease extension. Comparative flats in Ravenglass with a long lease were worth £270,000. The average ground rent payable was £55 collected quarterly. The lease ended on 25 February 2100. Considering the 75 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of costs.