Romford 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 gets more expensive. It is the case that most Romford tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Romford you really ought to see if your lease has between 70 and 90 years remaining. There are compelling reasons why a Romford flat owner with a lease having around 80 years unexpired should take action to make sure that a lease extension is effected without delay
Leasehold properties in Romford with over one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Romford,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 Romford valuers.
Max was the the leasehold proprietor of a 2 bedroom apartment in Romford on the market with a lease of fraction over 59 years unexpired. Max informally spoke with his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £125 per annum. No ground rent would be payable on a lease extension were Max to exercise his statutory right. Max obtained expert legal guidance and was able to make a more informed decision and handle with the matter and readily saleable.
In 2010 we were contacted by Dr Shannon Clarke who, having owned a one bedroom flat in Romford in July 2000. We are asked if we could shed any light on how much (roughly) price would be for a ninety year lease extension. Comparative homes in Romford with an extended lease were valued around £285,000. The mid-range ground rent payable was £45 billed monthly. The lease expired in 2096. Having 71 years remaining we calculated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 plus professional charges.
An example of a Lease Extension case for a Romford residence is 37 Lodge Court High Street in November 2013. the decision of the LVT was that the premium to be paid for the new lease was £25,559 This case was in relation to 1 flat. The remaining number of years on the lease was 57.5 years.