It’s an underpublicised certainty that a Rochford 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 early years due to the deflation being disguised by increases in the Rochford property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If lease term falls 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 extra value that a lease extension will add the property Most flat owners in Rochford will be able to extend under the legislation; however a conveyancer should be able to clarify if you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the process.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the equivalent 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 |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Regardless of whether you are a tenant or a landlord in Rochford,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Rochford valuers.
Luke owned a studio apartment in Rochford on the market with a lease of fraction over 72 years remaining. Luke informally spoke with his landlord a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent to start with set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Luke to invoke his statutory right. Luke procured expert legal guidance and secured satisfactory deal informally and sell the flat.
Last month we were e-mailed by Mr and Mrs. V Mason , who purchased a one bedroom apartment in Rochford in July 1995. The dilemma was if we could shed any light on how much (approximately) price could be to extend the lease by a further 90 years. Comparative flats in Rochford with an extended lease were worth £183,600. The average ground rent payable was £65 collected quarterly. The lease elapsed on 13 March 2083. Having 57 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £28,500 and £33,000 not including costs.
Last month we were called by Dr Reuben Ricardo , who bought a one bedroom flat in Rochford in May 2000. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by a further 90 years. Comparative properties in Rochford with a long lease were valued about £245,000. The average amount of ground rent was £45 billed monthly. The lease came to a finish on 25 October 2094. Having 68 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including costs.