As the the remaining lease term of a Rye residential lease decreases so does its value and therefore the value of your property. Where the lease has, more than 99 years to run then this decrease may be negligible that being said there will become a point in time when a lease has less than 80 years left as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary logic behind why you should consider extending without delay. The majority of flat owners in Rye will qualify for this right; nevertheless a conveyancing solicitor can confirm whether you are eligible for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for decades to come.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a landlord in Rye,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Rye valuers.
Isaac owned a studio flat in Rye on the market with a lease of a few days over 61 years outstanding. Isaac informally contacted his freeholder a well known Manchester-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 £100 annually. No ground rent would be due on a lease extension were Isaac to exercise his statutory right. Isaac procured expert advice and was able to make an informed decision and handle with the matter and sell the property.
Last Autumn we were phoned by Mr Michael Mason , who took over the lease of a garden flat in Rye in May 1999. The dilemma was if we could estimate the price would be to prolong the lease by 90 years. Identical flats in Rye with 100 year plus lease were valued around £285,000. The average amount of ground rent was £45 billed yearly. The lease terminated in 2097. Given that there were 71 years as a residual term we calculated the premium to the landlord to extend the lease to be between £12,400 and £14,200 plus professional charges.
In 2010 we were phoned by Ms Erin Williams who, having was assigned a lease of a studio apartment in Rye in January 1996. We are asked if we could estimate the premium would be to prolong the lease by an additional years. Comparative homes in Rye with 100 year plus lease were in the region of £225,800. The mid-range amount of ground rent was £60 invoiced annually. The lease finished in 2086. Having 60 years remaining we calculated the compensation to the landlord for the lease extension to be between £23,800 and £27,400 exclusive of legals.