Ringmer residential property held on a long lease is a depreciating asset as the leaseholder merely owns the property for a period of years.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 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 are not acceptable. 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle Ringmer 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.
Last Autumn Dexter, came perilously near to the 80-year mark with the lease on his leasehold apartment in Ringmer. In buying his flat two decades ago, the unexpired term was of no relevance. Fortunately, he noticed he needed to take action soon on a lease extension. Dexter extended the lease just ahead of time last May. Dexter and the freeholder via the managing agents subsequently agreed on sum of £6,000 . If he not met the deadline, the figure would have become more exhorbitant by at least £1,050.
In 2014 we were contacted by Mr and Mrs. B Martin who, having completed a newly refurbished apartment in Ringmer in November 2001. We are asked if we could approximate the price would be to prolong the lease by an additional years. Similar flats in Ringmer with a long lease were valued about £225,800. The average ground rent payable was £60 invoiced yearly. The lease concluded in 2086. Given that there were 60 years outstanding we calculated the compensation to the freeholder for the lease extension to be within £24,700 and £28,600 plus legals.
Mr and Mrs. K Sharif purchased a first floor flat in Ringmer in October 2008. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by an additional years. Comparable residencies in Ringmer with a long lease were in the region of £210,000. The mid-range amount of ground rent was £50 billed monthly. The lease finished in 2106. Considering the 80 years remaining we approximated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of expenses.