The market value of a leasehold property in Rugby depends on how many years the lease has remaining. If it is close to or fewer than 80 years you should foresee problems on re-sale, so it is recommended to arrange for a lease extension ahead of purchasing. It is preferable to commence the lease extension process when a lease still has 82 years remaining so that a lease extension can be addressed prior to the eighty year mark. Leasehold Reform legislation entitles Rugby qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus a further term of ninety years. 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 residential leasehold with more than one hundred 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 equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| 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 also be not less than 75 years at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Rugby can be a difficult process. We recommend you secure guidance from a lawyer and valuer with experience in this area.
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 procuring Rugby lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Subsequent to protracted discussions with the freeholder of her ground floor apartment in Rugby, Holly started the lease extension process as the eighty year threshold was rapidly approaching. The lease extension was finalised in May 2012. The landlord’s costs were kept to an absolute minimum.
In 2014 we were called by Mr U Cook who, having purchased a garden apartment in Rugby in February 2011. The question was if we could approximate the premium would be to prolong the lease by an additional years. Identical premises in Rugby with a long lease were worth £256,600. The average ground rent payable was £60 billed yearly. The lease concluded in 2077. Taking into account 52 years remaining we estimated the compensation to the freeholder to extend the lease to be between £39,000 and £45,000 exclusive of costs.
In 2011 we were e-mailed by Mr and Mrs. I Scott who, having completed a studio apartment in Rugby in February 2011. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year lease extension. Similar flats in Rugby with 100 year plus lease were valued about £218,000. The mid-range ground rent payable was £45 billed annually. The lease concluded in 2088. Given that there were 63 years outstanding we approximated the premium to the freeholder for the lease extension to be within £17,100 and £19,800 not including professional charges.