Risca leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Risca residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Risca you must check if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Risca can be a difficult process. We recommend you secure professional help from a lawyer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Risca lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Matthew was the the leasehold proprietor of a studio flat in Risca being marketed with a lease of just over fifty eight years remaining. Matthew informally spoke with his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent initially set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Matthew to exercise his statutory right. Matthew obtained expert legal guidance and secured an acceptable resolution informally and ending up with a market value flat.
Last Christmas we were approach by Dr L Sánchez , who completed a studio apartment in Risca in October 2004. The question was if we could estimate the premium could be for a ninety year lease extension. Comparative homes in Risca with 100 year plus lease were valued around £255,000. The average ground rent payable was £50 billed every twelve months. The lease lapsed on 22 February 2096. Considering the 70 years unexpired we estimated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 plus costs.
Last month we were contacted by Mr and Mrs. A Williams , who took over the lease of a newly refurbished apartment in Risca in March 1999. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by an additional years. Comparative residencies in Risca with an extended lease were valued around £246,800. The average amount of ground rent was £60 billed quarterly. The lease finished on 2 September 2076. Taking into account 50 years as a residual term we approximated the premium to the landlord for the lease extension to be between £44,700 and £51,600 plus professional charges.