It’s an underpublicised certainty that a Rochester residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Rochester property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If lease term slips under eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Rochester will be able to extend under the legislation; however a lawyer will be able to clarify if you are eligibility. In some situations you may not qualify. 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 lawyer throughout the process.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The lawyers that we work with procure Rochester 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 conveyancer we work with provide it.
Gabriel was the the leasehold owner of a conversion flat in Rochester on the market with a lease of a little over sixty years outstanding. Gabriel on an informal basis contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £100 annually. No ground rent would be payable on a lease extension were Gabriel to exercise his statutory right. Gabriel procured expert advice and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
In 2010 we were approached by Dr Austin Moreau who, having took over the lease of a one bedroom apartment in Rochester in November 2002. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by a further 90 years. Similar premises in Rochester with an extended lease were in the region of £205,000. The mid-range ground rent payable was £50 collected yearly. The lease terminated in 2103. Taking into account 78 years remaining we approximated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of expenses.
Last year we were contacted by Mr V Nguyen , who moved into a garden flat in Rochester in July 2011. We are asked if we could estimate the premium would be for a 90 year extension to my lease. Comparative properties in Rochester with an extended lease were worth £267,600. The mid-range amount of ground rent was £65 billed monthly. The lease finished on 20 April 2092. Given that there were 67 years outstanding we approximated the premium to the freeholder to extend the lease to be within £14,300 and £16,400 not including fees.