Rugby leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. The majority of owners of residential leasehold property in Rugby enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Rugby you really ought to see if your lease has between seventy and ninety years remaining. There are good reasons why a Rugby flat owner with a lease having around 80 years remaining should take action to ensure that a lease extension is put in place without delay
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Rugby,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Rugby valuers.
Nathan was the the leasehold owner of a studio flat in Rugby on the market with a lease of just over 61 years left. Nathan on an informal basis spoke with his landlord a well known local-based freehold company for a lease extension. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Nathan to exercise his statutory right. Nathan procured expert advice and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
In 2013 we were called by Mrs Y Bernard who, having owned a purpose-built flat in Rugby in March 2007. The dilemma was if we could approximate the compensation to the landlord would be to extend the lease by 90 years. Comparative flats in Rugby with a long lease were valued around £183,600. The average amount of ground rent was £65 invoiced annually. The lease ended on 24 October 2083. Having 57 years outstanding we calculated the premium to the freeholder to extend the lease to be within £28,500 and £33,000 plus expenses.
In 2010 we were called by Mr P Cox who, having completed a ground floor apartment in Rugby in February 2002. We are asked if we could shed any light on how much (approximately) premium could be for a 90 year extension to my lease. Identical properties in Rugby with an extended lease were valued about £245,000. The mid-range ground rent payable was £45 invoiced quarterly. The lease expired in 2094. Having 68 years outstanding we estimated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 plus costs.