The re-sale value of a leasehold property in Romford is impacted by how many years the lease has remaining. If it is close to or fewer than eighty years you should envisage difficulties on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. It is ideal to start the lease extension process when a lease still has 82 years to run so that a lease extension can be finalised in advance of the 80 year cut off point. Statute entitles Romford qualifying lessees to a ninety year extension added to their unexpired lease term (ie if your lease has fifty years remaining the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Romford with over one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure 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 lawyer we work with provide it.
Rory owned a conversion flat in Romford being sold with a lease of a few days over 61 years outstanding. Rory informally contacted his landlord a well known Bristol-based freehold company for a lease extension. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £125 per annum. Ordinarily, ground rent would not be due on a lease extension were Rory to invoke his statutory right. Rory obtained expert advice and secured satisfactory deal informally and readily saleable.
Last Winter we were called by Ms Chloe Morris , who completed a garden apartment in Romford in February 2011. We are asked if we could shed any light on how much (approximately) premium would likely be for a ninety year lease extension. Similar flats in Romford with a long lease were worth £240,600. The average ground rent payable was £60 collected quarterly. The lease concluded on 18 July 2088. Taking into account 62 years left we approximated the compensation to the landlord to extend the lease to be between £21,900 and £25,200 plus fees.
An example of a Lease Extension case for a Romford premises 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 number of years remaining on the existing lease(s) was 57.5 years.