Unfortunately that a Rawdon residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Rawdon property market.Once your lease gets to 85ish years, you should start considering a lease extension. If the number of years remaining dips under 80 years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Rawdon will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer for the duration of the formalities.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Rawdon,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Rawdon valuers.
Harvey owned a conversion apartment in Rawdon on the market with a lease of a few days over sixty years left. Harvey on an informal basis contacted his freeholder a well known local-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £125 annually. Ordinarily, ground rent would not be payable on a lease extension were Harvey to exercise his statutory right. Harvey procured expert advice and was able to make a more informed judgement and handle with the matter and sell the property.
In 2013 we were contacted by Mr and Mrs. V Lewis who, having was assigned a lease of a recently refurbished flat in Rawdon in May 1997. The dilemma was if we could approximate the premium would likely be to extend the lease by an additional years. Identical homes in Rawdon with 100 year plus lease were in the region of £225,400. The average amount of ground rent was £45 collected annually. The lease lapsed on 8 August 2089. Taking into account 64 years outstanding we estimated the premium to the freeholder for the lease extension to be between £16,200 and £18,600 not including costs.
In 2010 we were e-mailed by Mrs Zoe Reed who, having took over the lease of a one bedroom apartment in Rawdon in November 2002. The question was if we could estimate the premium would be to extend the lease by an additional years. Comparable premises in Rawdon with 100 year plus lease were valued around £270,000. The mid-range amount of ground rent was £55 invoiced annually. The lease lapsed on 20 May 2100. Having 75 years left we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 plus fees.