It’s a harsh certainty that a Rumney residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Rumney property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. If the number of years remaining slips below eighty years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of flat owners in Rumney will be able to extend under the legislation; however a conveyancer will be able to clarify whether you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
It is generally considered that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 45 years unexpired, the premises 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. |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with undertake Rumney 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.
14 months ago Ryan, came seriously near to the eighty-year mark with the lease on his ground floor flat in Rumney. In buying his property 18 years previously, the unexpired term was of little bearing. As luck would have it, it dawned on him that he needed to take action soon on a lease extension. Ryan was able to extend his lease at the eleventh hour last March. Ryan and the freeholder ultimately settled on an amount of £5,500 . If the lease had dipped to less than 80 years, the amount would have escalated by a minimum £950.
In 2009 we were phoned by Mr and Mrs. P Ramírez who, having acquired a first floor flat in Rumney in July 2006. We are asked if we could approximate the premium would likely be for a ninety year lease extension. Similar properties in Rumney with a long lease were worth £300,000. The average ground rent payable was £50 billed monthly. The lease end date was on 16 November 2102. Considering the 76 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 plus expenses.
Last Spring we were e-mailed by Mr Finley Jackson , who moved into a purpose-built flat in Rumney in February 2010. The question was if we could estimate the price would be to prolong the lease by an additional years. Identical properties in Rumney with 100 year plus lease were worth £257,800. The mid-range ground rent payable was £65 invoiced quarterly. The lease concluded on 5 October 2091. Considering the 65 years outstanding we calculated the premium to the freeholder to extend the lease to be within £18,100 and £20,800 plus expenses.