It’s a harsh truth that a Rhiwbina residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Rhiwbina property market.Once your lease nears 85ish years, you need to start considering a lease extension. If lease term dips under 80 years, you will end up paying 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 flat owners in Rhiwbina will be able to extend under the legislation; however a lawyer will be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer throughout the formalities.
Leasehold premises in Rhiwbina with in excess of one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges merit it.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
Retaining our service gives you better control over the value of your Rhiwbina leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Samuel was the the leasehold proprietor of a high value apartment in Rhiwbina on the market with a lease of fraction over 61 years remaining. Samuel on an informal basis spoke with his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £150 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Samuel to invoke his statutory right. Samuel procured expert legal guidance and was able to make an informed decision and handle with the matter and ending up with a market value flat.
In 2014 we were contacted by Dr K Rodríguez who, having acquired a one bedroom flat in Rhiwbina in February 1995. The question was if we could approximate the price would be to extend the lease by a further 90 years. Comparable flats in Rhiwbina with a long lease were worth £191,400. The average ground rent payable was £55 collected per annum. The lease lapsed on 8 June 2079. Considering the 54 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £34,200 and £39,600 plus expenses.
Mrs Bethan Stewart completed a purpose-built flat in Rhiwbina in April 2008. The dilemma was if we could approximate the premium could be for a ninety year lease extension. Comparable premises in Rhiwbina with 100 year plus lease were worth £295,000. The mid-range ground rent payable was £45 invoiced monthly. The lease ran out in 2099. Given that there were 74 years unexpired we calculated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of expenses.