Why you should commence your Runcorn lease extension

Why you should start your Runcorn lease extension today:

Increase your lease and increase your Runcorn property value

The re-sale value of a leasehold property in Runcorn is impacted by how many years the lease has left to run. If it is close to or less than 80 years you should foresee problems on re-sale, so it is advisable to arrange for the lease to be extended ahead of buying. Ideally one should start the process of extending the lease is when a lease still has 82 years to run so that a lease extension can be addressed prior to the 80 year cut off point. Current legislation enables Runcorn qualifying lessees to an additional term of 90 years on top of the remaining term, at a notional rent (no ground rent). The purpose of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.

An extended lease is almost the same value as a freehold

Leasehold premises in Runcorn with more than one hundred years remaining 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 home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit it.

Banks and Building Societies may decide not to issue a mortgage on a short lease

Mortgage lenders have specific criteria when lending monies secured on leasehold property. Many will simply refrain from lending at all once an unexpired lease term slips below a certain unexpired lease term. Many Mortgage lenders will not consider property with a remaining below 75 years as acceptable security. As well as impacting your ability to sell, it is also relevant where you are intending to refinance your Runcorn property.

What makes us experts in Runcorn lease extensions?

Irrespective of whether you are a tenant or a landlord in Runcorn,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Runcorn valuers.

Runcorn Lease Extension Example Cases:

Harry, Runcorn, Cheshire

In 2014 Harry, started to get close to the 80-year mark with the lease on his garden flat in Runcorn. Having purchased his flat twenty years previously, the length of the lease was of no significance. Thankfully, he recognised he would soon be paying way over the odds for a lease extension. Harry was able to extend his lease at the eleventh hour last April. Harry and the freeholder via the management company subsequently agreed on an amount of £6,000 . If the lease had descended below eighty years, the premium would have gone up by a minimum £1,100.

Runcorn case:

Mr and Mrs. D Sánchez completed a purpose-built flat in Runcorn in March 2002. The question was if we could approximate the premium would be to extend the lease by a further 90 years. Similar homes in Runcorn with a long lease were in the region of £176,200. The mid-range ground rent payable was £65 collected monthly. The lease lapsed in 2082. Having 56 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £29,500 and £34,000 exclusive of fees.

Runcorn case:

In 2013 we were contacted by Mr and Mrs. W Ramírez who, having owned a one bedroom apartment in Runcorn in October 2000. We are asked if we could estimate the premium would be to extend the lease by ninety years. Identical premises in Runcorn with an extended lease were in the region of £237,600. The mid-range amount of ground rent was £45 collected yearly. The lease lapsed on 13 July 2093. Given that there were 67 years left we estimated the compensation to the landlord for the lease extension to be between £11,400 and £13,200 exclusive of professional charges.