Roade leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Roade tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Roade you would be well advised to check if your lease has between 70 and ninety years left. There are compelling reasons why a Roade flat owner with a lease having around eighty years left should take steps to ensure that a lease extension is put in place without delay
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 35 years unexpired, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
| Royal Bank of Scotland | 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 lawyers that we work with undertake Roade 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 lawyer we work with provide it.
Following lengthy negotiations with the freeholder of her basement apartment in Roade, Jordan initiated the lease extension process as the eighty year deadline was fast advancing. The transaction completed in November 2011. The landlord’s charges were restricted to slightly above 600 pounds.
In 2013 we were approached by Dr O González who, having owned a ground floor apartment in Roade in February 2004. We are asked if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Comparable residencies in Roade with an extended lease were in the region of £250,000. The mid-range amount of ground rent was £50 collected annually. The lease concluded on 13 July 2095. Given that there were 69 years unexpired we estimated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 not including expenses.
In 2011 we were phoned by Dr B Torres who, having moved into a first floor flat in Roade in March 2007. We are asked if we could estimate the premium would likely be for a ninety year lease extension. Comparative homes in Roade with an extended lease were valued around £285,000. The mid-range ground rent payable was £55 billed every twelve months. The lease terminated in 2106. Taking into account 80 years outstanding we estimated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 plus fees.