If you are facing a significant premium because your lease in Rawcliffe has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Why you should start your Rawcliffe lease extension today:
Increase your lease and increase your Rawcliffe property value
Rawcliffe leases on residential deteriorating in value. Where your lease has approximately 90 years left, you should start considering the need for a lease extension. An important point to note is that it is financially advisable for your lease extension to be in place before the term of the existing lease falls under 80 years - otherwise a higher premium will be due. Leasehold owners in Rawcliffe will mostly qualify for a lease extension; however a solicitor will confirm if you qualify. In some cases you may not qualify. There are also strict timetables and formalities to follow once the process has started so it’s wise to be guided by a conveyancer during the process.
An extended lease has roughly the same value as a freehold
It is generally considered that a residential leasehold with over 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the property will be worth the same as a freehold for decades to come.
Mortgage lenders may not issue a mortgage with a short lease
The propensity since over the last decade has been for mortgage companies to tighten lending requirements across the board - this has extended to the property over which the mortgage is to be granted. This has resulted in the minimum number of years remaining under the lease required by banks has increased. In the past lenders would grant a mortgage on a lease with twenty years plus the term of the loan - routinely fifty year leases but those requirements are being increasingly undermined by the requirement for lengthy leases - many use a minimum term of 75 years as standard.
| Lender |
Requirement
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|---|
| Barnsley Building Society |
60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term.
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| 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.
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| 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.
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| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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| Virgin |
85 years at the time of completion. If it's less, we require it to be extended on or before completion.
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What makes us experts in Rawcliffe lease extensions?
The conveyancing solicitors that we work with handle Rawcliffe 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 lawyer we work with provide it.
Rawcliffe Lease Extension Case Studies:
Seth, Rawcliffe, East Yorkshire
In 2014 Seth, started to get near to the eighty-year threshold with the lease on his ground floor apartment in Rawcliffe. Having bought his property two decades ago, the length of the lease was of minimal relevance. Fortunately, it dawned on him that he would imminently be paying way over the odds for a lease extension. Seth extended the lease just ahead of time in June. Seth and the landlord subsequently agreed on the final figure of £5,500 . If the lease had descended lower than eighty years, the sum would have become more exhorbitant by a minimum £925.
Rawcliffe case:
Last Christmas we were e-mailed by Mr and Mrs. F Norbert , who
was assigned a lease of a newly refurbished flat in Rawcliffe in July 2008. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be to prolong the lease by a further 90 years. Comparative flats in Rawcliffe with an extended lease were in the region of £208,600. The average amount of ground rent was £60 billed yearly. The lease lapsed in 2083. Considering the 57 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £30,400 and £35,200 not including professional charges.
Rawcliffe case:
Last Spring we were called by Mr and Mrs. T Ramírez , who
was assigned a lease of a ground floor flat in Rawcliffe in January 1999. The question was if we could approximate the price would likely be to prolong the lease by ninety years. Comparative premises in Rawcliffe with a long lease were in the region of £200,000. The average ground rent payable was £50 billed quarterly. The lease ran out in 2103. Given that there were 77 years outstanding we estimated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 not including costs.