It’s a harsh truth that a Rochford residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Rochford property market.Where your lease has approximately 90 years left, you need to start thinking about 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 dips below 80 years - otherwise a higher premium will be due. Most leasehold owners in Rochford will be able to extend under the legislation; however a lawyer should be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the formalities.
Leasehold residencies in Rochford with more than 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Engaging our service gives you increased control over the value of your Rochford leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Harry, started to get near to the 80-year threshold with the lease on his first floor flat in Rochford. In buying his flat 19 years ago, the length of the lease was of minimal relevance. As luck would have it, he realised he needed to take action soon on a lease extension. Harry was able to extend his lease just ahead of time in September. Harry and the freeholder via the managing agents eventually agreed on a premium of £5,000 . If the lease had dipped to less than 80 years, the sum would have escalated by at least £1,000.
Mr J Díaz acquired a basement flat in Rochford in June 2004. The question was if we could approximate the price would be for a ninety year lease extension. Similar flats in Rochford with 100 year plus lease were in the region of £254,200. The mid-range amount of ground rent was £60 collected annually. The lease finished on 3 June 2077. Having 51 years remaining we calculated the compensation to the landlord for the lease extension to be between £43,700 and £50,600 not including costs.
In 2010 we were contacted by Dr N Richardson who, having owned a recently refurbished flat in Rochford in April 2002. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by an additional years. Comparable homes in Rochford with 100 year plus lease were in the region of £210,600. The average ground rent payable was £45 collected yearly. The lease ran out in 2088. Considering the 62 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £18,100 and £20,800 exclusive of expenses.