The market value of a leasehold property in Rugeley depends on how long the lease has left to run. If it is close to or fewer than eighty years you should expect problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of buying. Ideally one should start the lease extension process when a lease still has 82 years to run so that all matters can be addressed prior to the 80 year mark. Leasehold Reform legislation entitles Rugeley qualifying lessees to obtain a lease extension of 90 years on top of the remaining length of the lease at a peppercorn rent (that is, rent free). The reason of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the equivalent 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 many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Coventry Building Society | 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake Rugeley 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 conveyancer we work with provide it.
Jacob owned a conversion flat in Rugeley being sold with a lease of a few days over 61 years remaining. Jacob informally spoke with his landlord being a well known London-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 subject to a rise in the rent to £125 yearly. Ordinarily, ground rent would not be due on a lease extension were Jacob to invoke his statutory right. Jacob procured expert advice and secured satisfactory resolution informally and sell the flat.
Last Christmas we were contacted by Dr Yasmin Kelly , who was assigned a lease of a basement flat in Rugeley in April 2000. We are asked if we could approximate the premium would be for a 90 year lease extension. Identical residencies in Rugeley with an extended lease were in the region of £250,000. The average amount of ground rent was £50 collected monthly. The lease finished on 26 June 2096. Given that there were 70 years remaining we approximated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 plus legals.
Mr and Mrs. H David moved into a one bedroom flat in Rugeley in January 2001. The question was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparable homes in Rugeley with a long lease were worth £246,800. The average ground rent payable was £60 collected monthly. The lease ended on 9 July 2076. Given that there were 50 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £44,700 and £51,600 not including expenses.