Unfortunately that a Ramsey residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Ramsey property market.Once your lease nears 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls below 80 years - otherwise a higher amount will be due. The majority of leasehold owners in Ramsey will be able to extend under the legislation; however a lawyer should be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancer throughout the formalities.
It is generally accepted that a property with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with undertake Ramsey 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.
During the course of the last few months Rory, came dangerously near to the 80-year mark with the lease on his first floor flat in Ramsey. In buying his flat 18 years ago, the length of the lease was of minimal importance. Luckily, he became aware that he needed to take action soon on a lease extension. Rory was able to extend his lease at the eleventh hour in July. Rory and the landlord subsequently agreed on sum of £5,000 . If the lease had descended to less than 80 years, the sum would have gone up by at least £1,025.
Last month we were approach by Mr and Mrs. I Jones , who acquired a basement flat in Ramsey in August 2010. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year extension to my lease. Comparative properties in Ramsey with a long lease were in the region of £196,400. The average ground rent payable was £55 invoiced yearly. The lease ran out in 2080. Having 54 years remaining we approximated the compensation to the landlord for the lease extension to be within £35,200 and £40,600 not including legals.
In 2013 we were e-mailed by Mr and Mrs. F Brooks who, having completed a ground floor flat in Ramsey in April 1996. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by ninety years. Comparative flats in Ramsey with 100 year plus lease were valued around £295,000. The mid-range amount of ground rent was £45 billed per annum. The lease expiry date was in 2100. Having 74 years unexpired we approximated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 not including fees.