Unfortunately that a Rendlesham residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Rendlesham property market.Once your lease nears 85ish years, you need to start considering 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 80 years - otherwise a higher amount will be due. The majority of leasehold owners in Rendlesham will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you are eligibility. In some cases 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 throughout the process.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years unexpired, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| Chelsea 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with procure Rendlesham 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 conveyancing solicitor we work with provide it.
After unsuccessful negotiations with the freeholder of her purpose-built apartment in Rendlesham, Aimee initiated the lease extension process as the eighty year mark was swiftly approaching. The lease extension was finalised in August 2011. The landlord’s fees were restricted to approximately 700 GBP.
Dr Ellen Peterson moved into a one bedroom apartment in Rendlesham in August 2011. The question was if we could estimate the compensation to the landlord would be to prolong the lease by 90 years. Comparative premises in Rendlesham with a long lease were valued around £300,000. The mid-range amount of ground rent was £50 collected quarterly. The lease expired in 2101. Given that there were 76 years left we calculated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 not including costs.
Last March we were approach by Mr and Mrs. K Roberts , who was assigned a lease of a newly refurbished apartment in Rendlesham in August 2000. We are asked if we could shed any light on how much (approximately) premium would likely be to prolong the lease by ninety years. Similar residencies in Rendlesham with an extended lease were in the region of £257,800. The mid-range ground rent payable was £65 billed per annum. The lease came to a finish in 2090. Having 65 years outstanding we approximated the compensation to the landlord for the lease extension to be within £18,100 and £20,800 not including legals.