Roker leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Roker residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Roker you really ought to check if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under eighty years, the cost of any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
The lawyers that we work with undertake Roker 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.
Joseph owned a conversion flat in Roker being marketed with a lease of fraction over 72 years unexpired. Joseph on an informal basis approached his freeholder a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £100 annually. Ordinarily, ground rent would not be payable on a lease extension were Joseph to exercise his statutory right. Joseph procured expert legal guidance and secured satisfactory deal informally and ending up with a market value flat.
Last July we were contacted by Mr T Edwards , who took over the lease of a newly refurbished apartment in Roker in June 2000. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year lease extension. Comparable premises in Roker with an extended lease were valued around £245,000. The mid-range ground rent payable was £50 billed yearly. The lease expired on 11 January 2094. Taking into account 68 years remaining we approximated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 not including expenses.
Last Winter we were called by Ms N Cooper , who owned a basement flat in Roker in April 2005. The question was if we could estimate the price would be to extend the lease by 90 years. Comparative homes in Roker with an extended lease were worth £285,000. The mid-range amount of ground rent was £55 collected every twelve months. The lease came to a finish in 2105. Given that there were 79 years left we calculated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 plus fees.