It’s an underpublicised certainty that a Rise Park residential lease is a wasting asset. As the lease term reduces 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 Rise Park property market.Where your lease has approximately ninety years left, you should start considering a lease extension. If the number of years remaining dips below 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 Rise Park will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer from beginning to end of the process.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 30 years left, the property will be equivalent in value to a freehold for many years in the future.
| 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; |
| 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. |
| 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 |
Irrespective of whether you are a tenant or a landlord in Rise Park,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Rise Park valuers.
Last year Sebastian, started to get near to the 80-year mark with the lease on his studio flat in Rise Park. Having purchased his property 19 years ago, the lease term was of little interest. As luck would have it, he noticed he needed to take steps soon on Extending the lease. Sebastian arranged for a lease extension just in the nick of time in September. Sebastian and the freeholder ultimately agreed on an amount of £6,000 . If the lease had descended to less than eighty years, the premium would have escalated by at least £975.
Mr O Brown bought a studio apartment in Rise Park in July 2007. The question was if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by an additional years. Comparable properties in Rise Park with a long lease were valued around £216,000. The mid-range ground rent payable was £60 billed per annum. The lease finished on 5 September 2084. Given that there were 58 years remaining we calculated the premium to the freeholder to extend the lease to be between £28,500 and £33,000 plus expenses.
An example of a Lease Extension case for a Rise Park flat is Flat b 14 Kemble Road in May 2014. The Tribunal assessed the value of the premium payable for the lease extension to be £9,761 This case affected 1 flat.