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 your lease gets more expensive. Most owners of residential leasehold property in Romford enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Romford you really ought to see if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is generally considered that a property with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 |
The lawyers that we work with undertake Romford 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 conveyancing solicitor we work with provide it.
Last Summer Daniel, started to get near to the eighty-year threshold with the lease on his purpose- built flat in Romford. Having bought his property 18 years ago, the unexpired term was of minimal relevance. Fortunately, he became aware that he needed to take steps soon on Extending the lease. Daniel arranged for a lease extension at the eleventh hour last July. Daniel and the landlord who owned the flat above in the end agreed on sum of £6,000 . If the lease had slid to less than 80 years, the amount would have gone up by at least £975.
Mr and Mrs. C Gunderson took over the lease of a one bedroom flat in Romford in July 2003. We are asked if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Identical premises in Romford with an extended lease were in the region of £275,000. The mid-range ground rent payable was £45 invoiced annually. The lease expiry date was on 22 May 2094. Having 69 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 not including professional charges.
An example of a Lease Extension case for a Romford property 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.