For those whose Romford flat is held on a long lease, our message is clear – if you do nothing, the property will eventually revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to extend the lease.
It is generally accepted that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service will provide you increased control over the value of your Romford leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to lengthy correspondence with the landlord of her one bedroom flat in Romford, Jessica initiated the lease extension process as the 80 year mark was quickly coming. The legal work completed in March 2012. The landlord’s charges were kept to an absolute minimum.
Last Spring we were called by Mr and Mrs. Y Baker , who owned a newly refurbished flat in Romford in September 1999. The dilemma was if we could estimate the premium would be for a 90 year lease extension. Comparable premises in Romford with an extended lease were valued about £210,000. The mid-range ground rent payable was £50 invoiced yearly. The lease ended in 2105. Taking into account 80 years unexpired we estimated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 plus costs.
An example of a Lease Extension matter before the tribunal 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 related to 1 flat. The unexpired term was 57.5 years.