Romford leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Romford tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Romford you would be well advised to check if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold properties in Romford with more than one hundred years remaining on the lease are often 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 upside in buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with handle Romford 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.
Subsequent to protracted discussions with the landlord of her leasehold flat in Romford, Rosie initiated the lease extension process as the 80 year threshold was quickly coming. The legal work was finalised in October 2005. The landlord’s fees were restricted to about 700 pounds.
In 2013 we were called by Mr Thomas Davis who, having acquired a garden apartment in Romford in May 2002. The dilemma was if we could approximate the compensation to the landlord would likely be to prolong the lease by ninety years. Comparable residencies in Romford with 100 year plus lease were in the region of £223,400. The average amount of ground rent was £60 invoiced yearly. The lease came to a finish in 2083. Given that there were 59 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £27,600 and £31,800 plus costs.
An example of a Lease Extension matter before the tribunal for a Romford property is 37 Lodge Court High Street in November 2013. the decision of the LVT was that the premium to be paid for the new lease was £25,559 This case affected 1 flat. The unexpired residue of the current lease was 57.5 years.