Owning a flat usually means owning a lease of the property, which has a set term of years. The lease will normally be granted for a set period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Ruthin. Clearly, the term of lease remaining shortens over time. This is often overlooked and only raises itself as an issue when the flat or house has to be disposed of or refinanced. The fewer the years remaining the less it is worth and the more it will cost to obtain a lease extension. Qualifying leaseholders in Ruthin have the legal entitlement to extend the lease for a further 90 years in accordance with the 1993 Leasehold Reform Act. You should give due consideration before delaying your Ruthin lease extension. Holding off that expense now simply increases the price you will ultimately have to pay to extend your lease
Leasehold premises in Ruthin with more than one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake Ruthin 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 conveyancing solicitor we work with provide it.
Last October Rory, came precariously near to the 80-year mark with the lease on his ground floor apartment in Ruthin. In buying his home 18 years ago, the lease term was of little significance. Luckily, it dawned on him that he needed to take steps soon on Extending the lease. Rory was able to extend his lease just ahead of time last May. Rory and the landlord who owned the flat above ultimately settled on sum of £5,000 . If he had missed the deadline, the amount would have become more exhorbitant by at least £975.
In 2013 we were e-mailed by Dr Rebecca Murphy who, having owned a studio flat in Ruthin in August 2007. The question was if we could approximate the price would be for a ninety year lease extension. Similar residencies in Ruthin with a long lease were valued around £201,200. The average amount of ground rent was £55 collected annually. The lease terminated in 2081. Given that there were 56 years left we calculated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 plus legals.
Last month we were phoned by Mr and Mrs. C Lambert , who took over the lease of a recently refurbished flat in Ruthin in July 2006. The dilemma was if we could estimate the price would be for a 90 year extension to my lease. Comparative premises in Ruthin with an extended lease were worth £300,000. The mid-range ground rent payable was £50 billed quarterly. The lease lapsed on 10 March 2101. Having 76 years as a residual term we calculated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of fees.