The market value of a leasehold property in Rugby is impacted by how long the lease has left to run. If it is close to or fewer than eighty years you should foresee problems on re-sale, so it is advisable to arrange for a lease extension before purchasing. Ideally one should start the lease extension process when a lease still has 82 years unexpired so that formalities can be concluded prior to the 80 year threshold. Statute entitles Rugby qualifying lessees to an additional term of ninety years in addition to the unexpired term, at a peppercorn rent (no ground rent). The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Lease extensions in Rugby can be a difficult process. We recommend you get professional help from a conveyancer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Rugby lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
16 months ago Harrison, started to get close to the 80-year threshold with the lease on his first floor flat in Rugby. Having purchased his property two decades ago, the length of the lease was of no concern. Fortunately, he realised he needed to take steps soon on a lease extension. Harrison arranged for a lease extension just under the wire last May. Harrison and the freeholder via the managing agents ultimately agreed on sum of £5,500 . If the lease had slid to less than 80 years, the amount would have become more exhorbitant by a minimum £850.
Ms H White owned a garden flat in Rugby in February 2008. The question was if we could shed any light on how much (approximately) price could be to extend the lease by a further 90 years. Identical homes in Rugby with 100 year plus lease were in the region of £275,000. The average amount of ground rent was £55 invoiced yearly. The lease ended in 2101. Taking into account 76 years unexpired we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of legals.
In 2012 we were e-mailed by Ms Amelia Scott who, having took over the lease of a studio apartment in Rugby in November 2007. We are asked if we could shed any light on how much (roughly) price would be to prolong the lease by ninety years. Similar flats in Rugby with an extended lease were valued about £176,200. The mid-range amount of ground rent was £65 collected per annum. The lease ran out on 13 January 2081. Having 56 years remaining we approximated the premium to the freeholder for the lease extension to be within £29,500 and £34,000 not including costs.