Rawcliffe leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Rawcliffe residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Rawcliffe you would be well advised to investigate if your lease has between seventy and 90 years remaining. There are compelling reasons why a Rawcliffe flat owner with a lease having around eighty years remaining should take action to ensure that a lease extension is actioned without delay
Leasehold premises in Rawcliffe with over 100 years remaining on the lease are often regarded as a ‘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 reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you increased control over the value of your Rawcliffe leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Hugo, came critically close to the 80-year threshold with the lease on his two bedroom apartment in Rawcliffe. In buying his property 18 years previously, the length of the lease was of minimal interest. Luckily, he became aware that he would imminently be paying an inflated amount for Extending the lease. Hugo extended the lease just under the wire last July. Hugo and the freeholder eventually agreed on an amount of £6,000 . If he had missed the deadline, the premium would have increased by at least £925.
Last Christmas we were contacted by Mr and Mrs. L Morris , who purchased a one bedroom apartment in Rawcliffe in January 1995. The question was if we could shed any light on how much (approximately) price could be to prolong the lease by a further 90 years. Similar homes in Rawcliffe with 100 year plus lease were worth £181,600. The average amount of ground rent was £55 collected quarterly. The lease expired on 14 August 2078. Given that there were 52 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £30,400 and £35,200 not including legals.
Mr W Clarke was assigned a lease of a basement apartment in Rawcliffe in October 2005. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Identical homes in Rawcliffe with 100 year plus lease were valued about £285,000. The average amount of ground rent was £45 collected annually. The lease elapsed on 19 October 2098. Having 72 years remaining we approximated the premium to the landlord to extend the lease to be within £12,400 and £14,200 plus expenses.