Unfortunately that a Rayners Lane residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Rayners Lane property market.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below eighty years - otherwise a higher premium will be due. Most flat owners in Rayners Lane will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is generally accepted that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with handle Rayners Lane 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 lawyer we work with provide it.
Oscar was the the leasehold owner of a conversion apartment in Rayners Lane being marketed with a lease of a few days over 59 years outstanding. Oscar informally contacted his freeholder a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £50 yearly. Ordinarily, ground rent would not be due on a lease extension were Oscar to invoke his statutory right. Oscar obtained expert legal guidance and secured an acceptable resolution without resorting to tribunal and readily saleable.
Last month we were called by Dr S Miller , who moved into a first floor flat in Rayners Lane in July 2011. We are asked if we could approximate the compensation to the landlord could be for a ninety year lease extension. Identical flats in Rayners Lane with a long lease were valued about £200,000. The average ground rent payable was £50 invoiced annually. The lease concluded on 18 January 2103. Given that there were 78 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 not including fees.
An example of a Lease Extension decision for a Rayners Lane premises is GFF 1 Holyrood Avenue in May 2014. The Tenant wished to acquire a new (extended) lease and applied to the Willesden County Court who granted a vesting order on 20* March2013. The Tribunal decied that the premium to be paid was £9,062 This case related to 1 flat. The number of years remaining on the existing lease(s) was 79 years.