Owning a flat usually means owning a lease of the property, which has a finite term of years. your lease will normally be granted for a prescribed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Rayleigh. Clearly, the period of lease remaining reduces as time goes by. This may slip by relatively unnoticed when the flat or house needs to be sold or refinanced. The shorter the lease the lower the value of the property and the more it will cost to obtain a lease extension. Eligible leaseholders in Rayleigh have the right to extend the lease for an additional ninety years in accordance with statute. You should give due attention before delaying your Rayleigh lease extension. Putting off the cost now only increases the price you will ultimately incur to extend your lease
Leasehold premises in Rayleigh with in excess of 100 years outstanding on the lease are often regarded as a ‘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 freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Godiva Mortgages | 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. |
| 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 |
The conveyancers that we work with undertake Rayleigh 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.
Two years ago Lucas, started to get close to the eighty-year threshold with the lease on his one bedroom flat in Rayleigh. Having purchased his home two decades ago, the length of the lease was of no concern. As luck would have it, he realised he would imminently be paying an inflated amount for Extending the lease. Lucas arranged for a lease extension at the eleventh hour in May. Lucas and the landlord who owned the flat above ultimately settled on a premium of £5,000 . If he had missed the deadline, the figure would have become more costly by at least £850.
In 2010 we were contacted by Mr and Mrs. I Brooks who, having bought a one bedroom apartment in Rayleigh in June 1998. The question was if we could approximate the compensation to the landlord would likely be to extend the lease by ninety years. Similar homes in Rayleigh with a long lease were valued around £250,400. The mid-range amount of ground rent was £65 invoiced annually. The lease terminated in 2090. Considering the 64 years left we approximated the premium to the landlord to extend the lease to be between £19,000 and £22,000 exclusive of costs.
Last month we were e-mailed by Dr M André , who bought a basement apartment in Rayleigh in August 2003. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year lease extension. Similar flats in Rayleigh with an extended lease were in the region of £189,000. The average ground rent payable was £55 billed per annum. The lease ended in 2079. Given that there were 53 years left we calculated the premium to the freeholder for the lease extension to be within £28,500 and £33,000 not including costs.