Unfortunately that a Rogerstone residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Rogerstone property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If lease term falls below 80 years, you will end up paying 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 additional value that a lease extension will add the property Most flat owners in Rogerstone will be able to extend under the legislation; however a conveyancer should be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Rogerstone,the lease extension lawyers 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 Rogerstone valuers.
Freddie was the the leasehold proprietor of a conversion apartment in Rogerstone being marketed with a lease of a little over 72 years left. Freddie 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 landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Freddie to invoke his statutory right. Freddie procured expert advice and secured satisfactory deal informally and ending up with a market value flat.
Last year we were approach by Ms Isobel Jones , who took over the lease of a studio apartment in Rogerstone in November 2011. We are asked if we could approximate the premium could be to prolong the lease by a further 90 years. Identical premises in Rogerstone with a long lease were valued about £173,800. The average ground rent payable was £60 invoiced per annum. The lease lapsed in 2080. Considering the 55 years unexpired we approximated the premium to the landlord for the lease extension to be within £31,400 and £36,200 not including professional charges.
Last month we were called by Dr O Alexander , who completed a first floor flat in Rogerstone in July 1997. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Identical residencies in Rogerstone with an extended lease were worth £235,200. The average ground rent payable was £45 collected quarterly. The lease concluded on 2 May 2091. Given that there were 66 years remaining we estimated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 not including fees.