For those whose Rugeley home is held on a long lease, the message is clear – if you do nothing, the property will ultimately revert to your landlord, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more it will cost to extend the lease.
It is generally accepted that a property with more than 100 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 many years ahead.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Rugeley,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Rugeley valuers.
Two years ago Thomas, came very near to the 80-year threshold with the lease on his purpose- built apartment in Rugeley. Having bought his flat 18 years ago, the unexpired term was of minimal importance. Fortunately, he noticed he would soon be paying an escalated premium for a lease extension. Thomas was able to extend his lease just under the wire in May. Thomas and the freeholder ultimately settled on a premium of £5,500 . If the lease had dropped to less than 80 years, the premium would have escalated by a minimum £850.
In 2013 we were approached by Dr R González who, having moved into a ground floor apartment in Rugeley in November 2011. The dilemma was if we could approximate the premium could be for a 90 year extension to my lease. Comparable homes in Rugeley with 100 year plus lease were valued around £260,000. The mid-range ground rent payable was £50 invoiced yearly. The lease ended in 2097. Given that there were 72 years remaining we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of professional charges.
Dr L Howard acquired a purpose-built flat in Rugeley in October 1996. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year lease extension. Comparable properties in Rugeley with an extended lease were in the region of £256,600. The average ground rent payable was £60 billed per annum. The lease finished on 18 November 2077. Considering the 52 years left we estimated the compensation to the landlord to extend the lease to be within £39,000 and £45,000 not including fees.