The market value of a leasehold property in Rumney is impacted by how many years the lease has remaining. If it is near to or fewer than 80 years you should foresee problems on re-sale, so it is recommended to arrange for the lease to be extended before purchasing. It is ideal to start the lease extension process when the lease still has 82 years to run so that formalities can be concluded prior to the eighty year mark. Leasehold Reform legislation entitles Rumney qualifying lessees to obtain a lease extension of ninety years on top of the remaining lease term at a peppercorn rent (that is, rent free). The reason of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold premises in Rumney with in excess of one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors 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 lawyer we work with provide it.
Last October Henry, started to get near to the eighty-year mark with the lease on his one bedroom apartment in Rumney. Having purchased his property twenty years previously, the length of the lease was of no concern. by good luck, he realised he needed to take steps soon on a lease extension. Henry arranged for a lease extension at the eleventh hour in May. Henry and the freeholder via the management company ultimately agreed on the final figure of £5,500 . If the lease had slipped below eighty years, the sum would have gone up by a minimum £950.
Mr R Martin bought a purpose-built apartment in Rumney in June 2007. We are asked if we could estimate the price would likely be for a 90 year extension to my lease. Similar properties in Rumney with 100 year plus lease were worth £205,000. The average ground rent payable was £50 invoiced yearly. The lease terminated in 2105. Having 79 years left we approximated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 not including fees.
In 2014 we were called by Mrs M Sharif who, having completed a first floor flat in Rumney in October 2008. We are asked if we could shed any light on how much (approximately) price could be for a 90 year extension to my lease. Identical homes in Rumney with 100 year plus lease were in the region of £275,000. The average amount of ground rent was £65 invoiced per annum. The lease expired in 2094. Considering the 68 years unexpired we estimated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of fees.