Owning a flat usually means owning a lease of the property, which has a finite term of years. This lease will usually be granted for a fixed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Rumney. Clearly, the period of lease remaining shortens as time goes by. This may pass by relatively unnoticed when the property has to be sold or re-mortgaged. The fewer the years remaining the lower the value of the property and the more it will cost to procure a lease extension. Eligible long lease owners in Rumney have the right to extend the lease for a further ninety years in accordance with legislation. Do give careful deliberation before delaying your Rumney lease extension. Holding off that expense now only increases the price you will eventually have to pay for a lease extension
Leasehold residencies in Rumney with over 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 premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
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 conveyancing solicitor we work with provide it.
Ollie owned a high value flat in Rumney on the market with a lease of fraction over 59 years remaining. Ollie on an informal basis contacted his freeholder a well known London-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £50 yearly. Ordinarily, ground rent would not be due on a lease extension were Ollie to invoke his statutory right. Ollie procured expert legal guidance and was able to make a more informed decision and deal with the matter and sell the property.
Dr O Harris moved into a one bedroom flat in Rumney in November 2007. We are asked if we could estimate the price would be to extend the lease by 90 years. Identical properties in Rumney with 100 year plus lease were worth £260,200. The mid-range ground rent payable was £65 collected yearly. The lease lapsed in 2091. Given that there were 66 years left we estimated the premium to the freeholder for the lease extension to be between £16,200 and £18,600 not including costs.
Dr M White acquired a studio flat in Rumney in January 2004. We are asked if we could estimate the premium would likely be to prolong the lease by 90 years. Comparable premises in Rumney with a long lease were in the region of £198,800. The average amount of ground rent was £55 billed monthly. The lease ran out in 2080. Considering the 55 years left we calculated the premium to the freeholder for the lease extension to be within £33,300 and £38,400 exclusive of expenses.