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Main reasons to commence your Rise Park lease extension


Top reasons for lease extension now:

A Rise Park leasehold property depreciates with the years remaining on the lease.

The only way is down when it comes to Rise Park lease terms. Rise Park leaseholds that have a residual term fewer than 80 years will de-escalate in value at a rapid rate, and the cost of extending your lease will increase.

An extended lease is almost the same value as a freehold

It is generally considered that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the residence will be worth the same as a freehold for decades to come.

Lending institutions may not finance a property on a short lease

The trend since the credit crunch has been for lenders to tighten lending criteria generally - this has extended to the types of security over which the home loan is to be charged. This has resulted in the unexpired lease term required by banks has increased. Historically mortgage companies would lend on a lease with twenty years plus the term of the loan - typically fifty year leases but those requirements are being increasingly undermined by the requirement for longer and longer leases - many now have a minimum term of 75 years as a prerequisite.

Lender Requirement
Accord Mortgages 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.
Bank of Scotland Minimum 70 years from the date of the mortgage.
Leeds Building Society 85 years remaing from the start of the mortgage.
Nationwide Building Society - Our minimum unexpired lease term is 55 years.
- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).

Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:

Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer

New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer

Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.

SECOND HAND PROPERTIES

Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 55 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period is less than or equal to 5 years

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 55 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial, etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI

NEW BUILD PROPERTIES (includes office conversions)

Unacceptable - advise Issuing Office (Will be declined)
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house (does not apply to Shared Ownership)
- Starting Ground Rent greater than 0.1% of the property value
- Ground Rent review period less than or equal to every 5 years
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Ground Rent is linked to any indices greater than RPI
- Ground Rent is linked to the value of the building*
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- Starting Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than 5 years
- Ground Rent escalation less than or equal to RPI

* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years.
Virgin 85 years at the time of completion. If it's less, we require it to be extended on or before completion.

Why use us for your lease extension in Rise Park?

Lease extensions in Rise Park can be a difficult process. We recommend you procure guidance from a lawyer and valuer 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 in-depth market knowledge dealing with Rise Park lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.

Rise Park Lease Extension Case Studies:

Catherine, Rise Park, London,

Following unsuccessful negotiations with the freeholder of her ground floor flat in Rise Park, Catherine started the lease extension process as the eighty year threshold was quickly advancing. The legal work was concluded in March 2015. The freeholder’s fees were kept to an absolute minimum.

Rise Park case:

Mrs Rachel Ali bought a garden flat in Rise Park in September 1999. The question was if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by an additional years. Comparable properties in Rise Park with a long lease were in the region of £290,000. The average ground rent payable was £45 billed yearly. The lease expired in 2094. Given that there were 73 years remaining we approximated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 not including expenses.

Decision in Lewisham

An example of a Lease Extension decision for a Rise Park premises 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 was in relation to 1 flat.