It’s a harsh certainty that a Risca residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Risca property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. If lease term drops under eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Risca will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is generally accepted that a property with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Godiva Mortgages | 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with procure Risca 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.
Twenty four months ago Joseph, started to get near to the 80-year mark with the lease on his one bedroom flat in Risca. In buying his home two decades ago, the length of the lease was of no importance. Luckily, it dawned on him that he would imminently be paying an escalated premium for a lease extension. Joseph extended the lease at the eleventh hour in June. Joseph and the landlord who owned the flat above subsequently agreed on sum of £6,000 . If he failed to meet the deadline, the premium would have become more exhorbitant by a minimum £925.
Dr Kate García was assigned a lease of a garden apartment in Risca in February 1997. The question was if we could shed any light on how much (approximately) price would likely be for a ninety year extension to my lease. Similar properties in Risca with 100 year plus lease were worth £218,000. The mid-range ground rent payable was £45 billed quarterly. The lease end date was in 2089. Having 63 years left we approximated the compensation to the landlord to extend the lease to be within £17,100 and £19,800 not including costs.
Ms Hannah Wood bought a first floor flat in Risca in April 2012. We are asked if we could estimate the price could be to extend the lease by 90 years. Identical homes in Risca with an extended lease were in the region of £265,000. The average ground rent payable was £50 collected yearly. The lease lapsed in 2100. Taking into account 74 years unexpired we estimated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including expenses.