The value of Rugby leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate substantially once the unexpired lease term is less than 80 years
Leasehold residencies in Rugby with more than one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date 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. |
| Yorkshire 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. |
The conveyancers that we work with handle Rugby 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.
Luca owned a conversion apartment in Rugby on the market with a lease of a little over 61 years unexpired. Luca informally contacted his freeholder a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Luca to invoke his statutory right. Luca obtained expert advice and was able to make an informed judgement and handle with the matter and sell the flat.
Ms S Harris completed a garden apartment in Rugby in September 2000. The question was if we could approximate the price could be to prolong the lease by a further 90 years. Identical homes in Rugby with 100 year plus lease were valued around £193,400. The average amount of ground rent was £65 billed annually. The lease ended in 2085. Considering the 59 years unexpired we approximated the premium to the freeholder to extend the lease to be within £21,900 and £25,200 not including professional charges.
Mr and Mrs. H Gunderson was assigned a lease of a basement apartment in Rugby in April 1997. We are asked if we could approximate the premium would likely be for a ninety year extension to my lease. Similar residencies in Rugby with 100 year plus lease were in the region of £250,000. The average ground rent payable was £50 invoiced every twelve months. The lease terminated in 2096. Given that there were 70 years outstanding we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of costs.