Rye leases on residential deteriorating in value. if your lease has approximately 90 years unexpired, you should start thinking about a lease extension. 80 years is a significant number: when the unexpired term of a lease falls below this level then you start incurring an additional element called marriage value. Leasehold owners in Rye will mostly qualify for a lease extension; however It would be wise to check with a lawyer to check if you qualify. In some situations you may not qualify. There are prescribed deadlines and formalities to follow once the process is initiated so it’s prudent to be guided by a conveyancing solicitor during the process.
Leasehold residencies in Rye with more than one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 conveyancing solicitors that we work with handle Rye 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.
Austin was the the leasehold owner of a high value flat in Rye being marketed with a lease of a little over sixty years outstanding. Austin 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 grant an extension taking the lease to 125 years on the basis of an increased rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Austin to exercise his statutory right. Austin obtained expert advice and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
In 2009 we were contacted by Mrs I Bennett who, having purchased a studio apartment in Rye in November 2004. We are asked if we could approximate the price would likely be to prolong the lease by a further 90 years. Similar properties in Rye with an extended lease were valued about £240,600. The average amount of ground rent was £60 billed every twelve months. The lease lapsed in 2087. Having 62 years outstanding we calculated the premium to the freeholder to extend the lease to be within £21,900 and £25,200 exclusive of costs.
Mr and Mrs. R Rivera bought a one bedroom flat in Rye in January 1997. The question 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. Identical properties in Rye with a long lease were valued about £174,200. The mid-range amount of ground rent was £55 collected every twelve months. The lease expired on 23 April 2076. Having 51 years remaining we calculated the premium to the landlord for the lease extension to be within £31,400 and £36,200 exclusive of costs.