Unfortunately that a Runcorn residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Runcorn property prices.Where your lease has approximately ninety years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips under 80 years - otherwise a higher amount will be payable. The majority of flat owners in Runcorn will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. 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.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Runcorn,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Runcorn valuers.
Lucas owned a studio flat in Runcorn on the market with a lease of a little over 72 years unexpired. Lucas informally spoke with his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Lucas to exercise his statutory right. Lucas obtained expert advice and was able to make a more informed judgement and handle with the matter and sell the flat.
Last year we were e-mailed by Dr P Lefebvre , who owned a garden flat in Runcorn in August 2001. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year extension to my lease. Comparable premises in Runcorn with an extended lease were valued about £265,000. The average ground rent payable was £50 billed monthly. The lease lapsed in 2099. Given that there were 73 years outstanding we estimated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus legals.
Last month we were approach by Dr Sophia Norbert , who owned a studio flat in Runcorn in June 2010. We are asked if we could approximate the premium could be to extend the lease by an additional years. Similar residencies in Runcorn with an extended lease were in the region of £264,000. The average ground rent payable was £60 collected every twelve months. The lease expired in 2079. Given that there were 53 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £37,100 and £42,800 plus legals.