Rhuddlan leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Rhuddlan residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Rhuddlan you must investigate if your lease has between seventy and 90 years left. 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 pay is what is known as a marriage value
It is generally considered that a property with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years left, the residence will be equivalent in value to a freehold for many years ahead.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancing solicitors that we work with undertake Rhuddlan 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.
Two years ago Alex, came perilously near to the eighty-year threshold with the lease on his leasehold apartment in Rhuddlan. In buying his home two decades ago, the lease term was of little concern. by good luck, he realised he would soon be paying an escalated premium for Extending the lease. Alex was able to extend his lease just ahead of time last June. Alex and the landlord ultimately agreed on the final figure of £6,000 . If he had missed the deadline, the amount would have escalated by at least £875.
Mrs K Kelly acquired a basement flat in Rhuddlan in May 2003. The question was if we could approximate the price would be for a 90 year lease extension. Comparable residencies in Rhuddlan with 100 year plus lease were valued about £166,800. The average ground rent payable was £50 invoiced monthly. The lease ended on 6 September 2075. Given that there were 50 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £32,300 and £37,400 plus fees.
Mr and Mrs. U Morris was assigned a lease of a one bedroom flat in Rhuddlan in September 2000. We are asked if we could estimate the premium would be to prolong the lease by an additional years. Comparable premises in Rhuddlan with an extended lease were valued about £280,000. The average ground rent payable was £45 collected every twelve months. The lease terminated in 2095. Taking into account 70 years unexpired we estimated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 not including expenses.