As the the remaining lease term of a Rochford domestic lease diminished so does its value and therefore the value of your property. Where the residual term has, more than 125 years to run then this decrease may be of little impact that being said there will become a stage when a lease has less than eighty years remaining as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the primary reason why you should extend the lease without delay. The majority of flat owners in Rochford will qualify for this right; nevertheless a lawyer should be able to advise if you are eligible for a lease extension. In limited situations you may not qualify, the most common reason being that you have owned the property for under two years.
It is generally accepted that a residential leasehold with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years remaining, the residence will be equivalent in value to a freehold for decades to come.
| 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. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
The conveyancers that we work with handle Rochford 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 conveyancer we work with provide it.
In 2014 Hugo, started to get close to the eighty-year mark with the lease on his ground floor flat in Rochford. In buying his flat two decades ago, the unexpired term was of no bearing. Fortunately, it dawned on him that he needed to take steps soon on Extending the lease. Hugo was able to extend his lease just in the nick of time last August. Hugo and the freeholder via the managing agents subsequently settled on the final figure of £5,000 . If the lease had dipped to less than 80 years, the amount would have increased by a minimum £850.
In 2010 we were contacted by Mr Y Davis who, having acquired a basement apartment in Rochford in April 2006. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by an additional years. Identical homes in Rochford with an extended lease were valued around £265,000. The average ground rent payable was £50 collected annually. The lease ended in 2100. Considering the 74 years unexpired we estimated the premium to the landlord to extend the lease to be between £9,500 and £11,000 plus fees.
In 2011 we were contacted by Mr Sebastian Walker who, having completed a basement flat in Rochford in September 2009. The question was if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year lease extension. Similar properties in Rochford with a long lease were valued about £166,400. The mid-range ground rent payable was £60 invoiced quarterly. The lease lapsed on 22 March 2080. Given that there were 54 years outstanding we approximated the premium to the landlord for the lease extension to be within £32,300 and £37,400 exclusive of fees.