Unfortunately that a Rothbury 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 reduction being disguised by increases in the Rothbury 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 falls below 80 years - otherwise a higher premium will be payable. The majority of leasehold owners in Rothbury will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold properties in Rothbury with in excess of 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 property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 conveyancing solicitors that we work with procure Rothbury 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 conveyancing solicitor we work with provide it.
Ryan owned a studio flat in Rothbury on the market with a lease of a few days over 72 years left. Ryan informally spoke with his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £125 per annum. No ground rent would be payable on a lease extension were Ryan to invoke his statutory right. Ryan obtained expert advice and was able to make an informed decision and deal with the matter and ending up with a market value flat.
Mr and Mrs. W Roux acquired a ground floor apartment in Rothbury in October 2009. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Comparable homes in Rothbury with a long lease were worth £174,200. The average amount of ground rent was £55 invoiced quarterly. The lease ran out in 2076. Given that there were 51 years left we approximated the compensation to the landlord for the lease extension to be within £31,400 and £36,200 exclusive of professional charges.
In 2014 we were contacted by Dr L Wood who, having was assigned a lease of a one bedroom flat in Rothbury in May 2005. The dilemma was if we could estimate the premium could be to prolong the lease by 90 years. Similar homes in Rothbury with a long lease were worth £285,000. The mid-range ground rent payable was £45 billed annually. The lease came to a finish on 23 June 2096. Having 71 years outstanding we approximated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 exclusive of legals.