Reigate leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Most owners of residential leasehold property in Reigate enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Reigate you must check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Reigate with in excess of one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancers that we work with undertake Reigate 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 Stanley, came precariously close to the eighty-year threshold with the lease on his studio flat in Reigate. Having purchased his flat twenty years ago, the unexpired term was of minimal concern. Thankfully, he realised he needed to take steps soon on Extending the lease. Stanley was able to extend his lease at the eleventh hour in May. Stanley and the landlord in the end agreed on a premium of £5,000 . If the lease had dipped to less than eighty years, the sum would have increased by at least £1,125.
Ms O Nelson completed a purpose-built flat in Reigate in May 1999. We are asked if we could approximate the compensation to the landlord could be to extend the lease by an additional years. Identical flats in Reigate with an extended lease were worth £205,000. The mid-range ground rent payable was £50 invoiced every twelve months. The lease concluded in 2104. Given that there were 79 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 not including professional charges.
In 2014 we were called by Mrs I Rodríguez who, having owned a basement apartment in Reigate in March 2010. We are asked if we could shed any light on how much (approximately) premium would likely be to prolong the lease by an additional years. Comparable residencies in Reigate with an extended lease were valued around £275,000. The mid-range ground rent payable was £65 billed quarterly. The lease finished in 2093. Considering the 68 years left we estimated the premium to the landlord for the lease extension to be within £13,300 and £15,400 not including professional charges.