Ruabon 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 the lease gets more expensive. It is the case that most Ruabon tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Ruabon you should check if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in Ruabon,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Ruabon valuers.
William was the the leasehold owner of a conversion flat in Ruabon on the market with a lease of fraction over 59 years unexpired. William on an informal basis approached his landlord a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £125 annually. No ground rent would be payable on a lease extension were William to invoke his statutory right. William procured expert legal guidance and was able to make a more informed judgement and deal with the matter and readily saleable.
In 2011 we were called by Mr Aarav Moore who, having acquired a studio flat in Ruabon in May 2010. We are asked if we could approximate the price could be to prolong the lease by 90 years. Comparative properties in Ruabon with 100 year plus lease were in the region of £208,600. The mid-range amount of ground rent was £60 invoiced yearly. The lease finished on 27 August 2082. Having 57 years left we calculated the premium to the freeholder for the lease extension to be within £30,400 and £35,200 not including legals.
Mr and Mrs. K Allen purchased a newly refurbished flat in Ruabon in October 2012. We are asked if we could estimate the premium would likely be for a ninety year lease extension. Identical residencies in Ruabon with 100 year plus lease were in the region of £200,000. The average ground rent payable was £50 billed yearly. The lease ended on 25 October 2102. Considering the 77 years left we approximated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 not including expenses.