It’s an underpublicised truth that a Rumney residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Rumney property prices.Once your lease gets to 85ish years, you need to start considering a lease extension. If the number of years remaining slips below 80 years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Rumney will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer throughout the formalities.
Leasehold premises in Rumney with in excess of one hundred years unexpired 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 circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Godiva Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
The lawyers that we work with handle 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.
Toby owned a studio apartment in Rumney being marketed with a lease of a little over 72 years unexpired. Toby on an informal basis spoke with his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £200 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Toby to exercise his statutory right. Toby procured expert advice and was able to make an informed decision and deal with the matter and sell the flat.
In 2014 we were called by Mr and Mrs. W Turner who, having moved into a one bedroom apartment in Rumney in April 1997. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year extension to my lease. Comparative homes in Rumney with a long lease were in the region of £295,000. The average ground rent payable was £50 collected per annum. The lease elapsed in 2101. Having 75 years outstanding we estimated the premium to the landlord to extend the lease to be between £8,600 and £9,800 plus expenses.
Ms Jordan Simon completed a purpose-built flat in Rumney in July 2003. We are asked if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Comparable flats in Rumney with a long lease were valued about £250,400. The mid-range ground rent payable was £65 collected monthly. The lease expiry date was on 7 May 2090. Taking into account 64 years remaining we estimated the premium to the landlord to extend the lease to be between £19,000 and £22,000 plus professional charges.