Unfortunately that a Risca residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Risca property market.Once your lease nears 85ish years, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips lower than 80 years - otherwise a higher premium will be payable. Most leasehold owners in Risca will be able to extend under the legislation; however a conveyancer will be able to confirm if you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
It is generally accepted that a property with in excess of 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Retaining our service will provide you increased control over the value of your Risca leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Nathan owned a conversion apartment in Risca on the market with a lease of fraction over fifty eight years left. Nathan on an informal basis spoke with his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £50 yearly. No ground rent would be payable on a lease extension were Nathan to exercise his statutory right. Nathan procured expert advice and secured satisfactory deal informally and readily saleable.
Last month we were called by Mr and Mrs. J Rodríguez , who owned a first floor flat in Risca in June 1998. We are asked if we could estimate the price would likely be to prolong the lease by a further 90 years. Comparative properties in Risca with 100 year plus lease were valued about £285,000. The average amount of ground rent was £55 billed monthly. The lease ran out on 22 February 2105. Having 80 years outstanding we estimated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 plus fees.
Mr Arthur Murphy owned a one bedroom apartment in Risca in February 2004. The dilemma was if we could shed any light on how much (roughly) price could be to extend the lease by 90 years. Comparable properties in Risca with 100 year plus lease were in the region of £200,800. The mid-range ground rent payable was £65 billed yearly. The lease concluded in 2085. Given that there were 60 years unexpired we calculated the premium to the freeholder for the lease extension to be within £20,900 and £24,200 exclusive of expenses.