Rye leases on domestic deteriorating in value. Where your lease has about ninety years unexpired, you should start considering the need for a lease extension. It is important to recognise that it is that it is financially advisable for the lease extension to be in place before the term of the existing lease falls under eighty years - otherwise a higher amount will be payable. Flat owners in Rye will usually be legally entitled to a lease extension; however it’s a good idea to check with a lawyer to confirm your eligibility. In certain circumstances you may not be entitled. There are also strict timetables and formalities to follow once the process is initiated so it’s sensible to be guided by a lawyer during the process.
It is generally considered that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date 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 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 conveyancer we work with provide it.
Half a year ago Jonathan, came precariously close to the eighty-year mark with the lease on his first floor flat in Rye. Having purchased his flat twenty years ago, the unexpired term was of minimal bearing. Fortunately, he recognised he needed to take steps soon on a lease extension. Jonathan arranged for a lease extension just under the wire in August. Jonathan and the landlord eventually settled on sum of £6,000 . If the lease had slipped below eighty years, the amount would have increased by a minimum £900.
Mrs H Scott moved into a basement apartment in Rye in September 2005. The question was if we could estimate the price could be for a ninety year lease extension. Similar properties in Rye with an extended lease were valued about £225,800. The mid-range amount of ground rent was £60 collected quarterly. The lease termination date was in 2086. Given that there were 60 years left we calculated the compensation to the freeholder for the lease extension to be within £23,800 and £27,400 not including expenses.
Last Christmas we were e-mailed by Dr R Morris , who bought a ground floor flat in Rye in October 2005. The dilemma was if we could approximate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Similar premises in Rye with 100 year plus lease were in the region of £210,000. The mid-range amount of ground rent was £50 collected every twelve months. The lease expired on 17 March 2106. Given that there were 80 years outstanding we calculated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of costs.