Rumney leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Rumney tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Rumney you really ought to see if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold residencies in Rumney with in excess of 100 years left on the lease are sometimes 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 freehold unless savings on ground rent and maintenance charges justify 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Rumney can be a difficult process. We recommend you procure guidance from a conveyancing solicitor and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Rumney lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
During the course of the last few months Oliver, started to get close to the 80-year threshold with the lease on his purpose- built apartment in Rumney. Having bought his property two decades ago, the unexpired term was of no concern. by good luck, he recognised he needed to take action soon on Extending the lease. Oliver extended the lease at the eleventh hour in September. Oliver and the freeholder eventually agreed on an amount of £6,000 . If the lease had fallen lower than eighty years, the figure would have increased by at least £1,075.
Last Autumn we were e-mailed by Mr J Lefèvre , who acquired a basement apartment in Rumney in September 2002. We are asked if we could estimate the price would be for a 90 year extension to my lease. Comparative premises in Rumney with an extended lease were in the region of £285,000. The average ground rent payable was £45 invoiced yearly. The lease expired on 25 July 2098. Having 72 years as a residual term we calculated the premium to the landlord for the lease extension to be within £12,400 and £14,200 not including expenses.
Dr Aaron Flores bought a purpose-built apartment in Rumney in June 2004. We are asked if we could approximate the compensation to the landlord would be for a 90 year extension to my lease. Comparable properties in Rumney with 100 year plus lease were valued about £233,200. The average ground rent payable was £60 collected quarterly. The lease lapsed in 2087. Having 61 years left we estimated the compensation to the freeholder to extend the lease to be within £22,800 and £26,400 not including costs.