Rayners Lane leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Rayners Lane tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Rayners Lane you would be well advised to investigate if your lease has between seventy and 90 years left. There are good reasons why a Rayners Lane flat owner with a lease having around 80 years remaining should take steps to ensure that a lease extension is effected without delay
Leasehold properties in Rayners Lane with over 100 years left on the lease are sometimes referred to as ‘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 to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| 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 lawyers that we work with undertake Rayners Lane 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.
Eli was the the leasehold proprietor of a studio flat in Rayners Lane being sold with a lease of a few days over 61 years left. Eli informally contacted his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £125 yearly. No ground rent would be payable on a lease extension were Eli to invoke his statutory right. Eli procured expert legal guidance and was able to make a more informed judgement and deal with the matter and readily saleable.
In 2012 we were approached by Mr and Mrs. N Green who, having took over the lease of a recently refurbished apartment in Rayners Lane in November 1995. We are asked if we could estimate the premium could be for a 90 year lease extension. Comparable premises in Rayners Lane with an extended lease were valued around £189,000. The mid-range ground rent payable was £55 invoiced every twelve months. The lease concluded on 24 July 2079. Given that there were 53 years left we estimated the premium to the freeholder to extend the lease to be within £28,500 and £33,000 exclusive of fees.
An example of a Lease Extension matter before the tribunal for a Rayners Lane property is GFF 1 Holyrood Avenue in May 2014. The Tenant wished to acquire a new (extended) lease and applied to the Willesden County Court who granted a vesting order on 20* March2013. The Tribunal decied that the premium to be paid was £9,062 This case was in relation to 1 flat. The number of years remaining on the existing lease(s) was 79 years.