Unfortunately that a Runcorn residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Runcorn property prices.Once your lease gets to 85ish years, you should start thinking about a lease extension. If lease term dips below eighty years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most leasehold owners in Runcorn will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
Leasehold properties in Runcorn with more than 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in buying the freehold 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 are not acceptable. 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; |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service will provide you better control over the value of your Runcorn leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Following lengthy discussions with the freeholder of her ground floor flat in Runcorn, Lydia started the lease extension process just as her lease was coming close to the crucial eighty-year threshold. The lease extension completed in January 2015. The freeholder’s costs were negotiated to about 450 GBP.
Last month we were approach by Dr L Nelson , who bought a purpose-built apartment in Runcorn in June 1997. The dilemma was if we could estimate the price would likely be to prolong the lease by an additional years. Similar homes in Runcorn with a long lease were valued around £255,000. The average amount of ground rent was £50 billed every twelve months. The lease expiry date was in 2097. Taking into account 71 years outstanding we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 plus professional charges.
In 2013 we were approached by Mr and Mrs. R Bailey who, having moved into a first floor flat in Runcorn in October 1997. We are asked if we could approximate the price could be for a ninety year lease extension. Identical residencies in Runcorn with an extended lease were worth £254,200. The average ground rent payable was £60 invoiced annually. The lease finished in 2077. Considering the 51 years unexpired we approximated the premium to the freeholder for the lease extension to be within £43,700 and £50,600 plus expenses.