Rhosllanerchrugog leases on residential deteriorating in value. if your lease has about 90 years left, you should start considering the need for a lease extension. If lease term is less than 80 years, you will then have to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Flat owners in Rhosllanerchrugog will usually be legally entitled to a lease extension; however it’s a good idea to check with a conveyancer to confirm your eligibility. In certain cases you may not be entitled. There are also strict timetables and procedures to comply with once the process is initiated so it’s prudent to be guided by a lawyer during the process.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years unexpired, the premises will be equivalent in value to 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Yorkshire 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. |
Irrespective of whether you are a tenant or a landlord in Rhosllanerchrugog,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Rhosllanerchrugog valuers.
Last year Jacob, came perilously close to the 80-year threshold with the lease on his two bedroom flat in Rhosllanerchrugog. In buying his flat two decades ago, the lease term was of no concern. Fortunately, he recognised he needed to take steps soon on Extending the lease. Jacob arranged for a lease extension at the eleventh hour last May. Jacob and the landlord in the end agreed on sum of £5,500 . If he not met the deadline, the amount would have escalated by a minimum £950.
In 2011 we were phoned by Mr and Mrs. U Sharif who, having purchased a one bedroom flat in Rhosllanerchrugog in May 2000. We are asked if we could estimate the price would be for a ninety year extension to my lease. Comparative properties in Rhosllanerchrugog with an extended lease were in the region of £173,800. The average ground rent payable was £60 billed monthly. The lease expired in 2081. Having 55 years remaining we approximated the premium to the landlord for the lease extension to be between £31,400 and £36,200 plus fees.
In 2011 we were phoned by Mr and Mrs. W Leroy who, having owned a first floor flat in Rhosllanerchrugog in September 2012. The question was if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by ninety years. Comparable homes in Rhosllanerchrugog with 100 year plus lease were valued about £235,200. The average amount of ground rent was £45 invoiced yearly. The lease finished in 2092. Considering the 66 years unexpired we estimated the premium to the landlord to extend the lease to be within £12,400 and £14,200 plus legals.