Rogiet leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Rogiet residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Rogiet you must investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Rogiet with over 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| 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 |
The conveyancers that we work with procure Rogiet 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.
Last Spring Tommy, came critically near to the 80-year threshold with the lease on his first floor apartment in Rogiet. Having bought his home twenty years previously, the unexpired term was of no significance. As luck would have it, he realised he needed to take steps soon on Extending the lease. Tommy extended the lease just in the nick of time in July. Tommy and the landlord ultimately settled on an amount of £5,000 . If the lease had dipped below eighty years, the amount would have escalated by a minimum £975.
Mr Isaac Moore acquired a garden flat in Rogiet in January 1999. We are asked if we could shed any light on how much (approximately) price would be to prolong the lease by ninety years. Similar residencies in Rogiet with an extended lease were worth £225,400. The mid-range ground rent payable was £45 invoiced every twelve months. The lease came to a finish in 2090. Given that there were 64 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £15,200 and £17,600 not including costs.
Last year we were called by Ms B Bonnet , who bought a ground floor flat in Rogiet in May 2004. The question was if we could estimate the premium would likely be to extend the lease by a further 90 years. Similar flats in Rogiet with an extended lease were worth £270,000. The mid-range amount of ground rent was £55 collected monthly. The lease came to a finish in 2101. Considering the 75 years outstanding we estimated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 plus legals.