Unfortunately that a Rossett residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Rossett property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips lower than 80 years - otherwise a higher amount will be payable. The majority of leasehold owners in Rossett will be able to extend under the legislation; however a conveyancer will be able to confirm 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 is initiated and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
It is generally considered that a property with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence 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 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; |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake Rossett 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 lawyer we work with provide it.
Leo was the the leasehold owner of a conversion flat in Rossett being sold with a lease of a few days over 72 years left. Leo informally contacted his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £100 per annum. No ground rent would be payable on a lease extension were Leo to invoke his statutory right. Leo procured expert legal guidance and secured an acceptable deal without resorting to tribunal and readily saleable.
In 2012 we were phoned by Mr W Evans who, having acquired a first floor flat in Rossett in July 1997. The question was if we could approximate the price would likely be to extend the lease by a further 90 years. Comparable properties in Rossett with 100 year plus lease were valued about £166,400. The mid-range amount of ground rent was £60 collected per annum. The lease ran out on 7 March 2080. Having 54 years remaining we calculated the premium to the freeholder to extend the lease to be within £32,300 and £37,400 plus costs.
Last April we were called by Dr Jude Smith , who moved into a basement flat in Rossett in February 2002. The dilemma was if we could shed any light on how much (roughly) price would likely be for a ninety year lease extension. Similar homes in Rossett with 100 year plus lease were valued around £227,800. The average ground rent payable was £45 billed monthly. The lease concluded in 2091. Considering the 65 years remaining we approximated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 not including professional charges.