It’s an underpublicised certainty that a Rotherham residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Rotherham property prices.Where your lease has approximately 90 years left, you need to start considering 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 under eighty years - otherwise a higher amount will be due. The majority of leasehold owners in Rotherham will be able to extend under the legislation; however a conveyancer should be able to clarify whether you qualify for an extension. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer throughout the formalities.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 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 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Rotherham,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Rotherham valuers.
In 2014 Ollie, started to get close to the 80-year mark with the lease on his garden flat in Rotherham. In buying his flat two decades ago, the length of the lease was of minimal significance. Fortunately, he became aware that he needed to take steps soon on Extending the lease. Ollie arranged for a lease extension just under the wire last January. Ollie and the freeholder via the managing agents subsequently agreed on an amount of £5,000 . If the lease had slipped to less than eighty years, the premium would have escalated by at least £1,025.
Last year we were e-mailed by Mr Harvey Stewart , who bought a recently refurbished apartment in Rotherham in April 2008. We are asked if we could estimate the price would likely be to extend the lease by an additional years. Similar properties in Rotherham with an extended lease were valued about £176,200. The mid-range ground rent payable was £65 billed quarterly. The lease came to a finish in 2082. Taking into account 56 years unexpired we approximated the premium to the landlord for the lease extension to be within £29,500 and £34,000 not including fees.
Mr and Mrs. B Martin purchased a garden flat in Rotherham in May 1998. We are asked if we could estimate the compensation to the landlord could be for a ninety year lease extension. Identical homes in Rotherham with an extended lease were in the region of £242,600. The mid-range ground rent payable was £45 billed yearly. The lease expiry date was in 2093. Taking into account 67 years outstanding we estimated the premium to the landlord for the lease extension to be between £11,400 and £13,200 plus expenses.