It’s a harsh certainty that a Romford residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Romford property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If lease term dips below eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most leasehold owners in Romford will be able to extend under the legislation; however a conveyancer will be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
Leasehold residencies in Romford with in excess of 100 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 home. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges warrant it.
Lender | Requirement |
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Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
Godiva Mortgages | 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. |
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. |
Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Romford,the lease extension solicitors 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.
During the course of the last few months Milo, started to get close to the 80-year threshold with the lease on his first floor flat in Romford. Having bought his home 18 years previously, the length of the lease was of no concern. Fortunately, it dawned on him that he needed to take action soon on a lease extension. Milo was able to extend his lease at the eleventh hour last January. Milo and the landlord in the end settled on an amount of £6,000 . If the lease had gone to less than eighty years, the figure would have gone up by a minimum £1,075.
Last Autumn we were phoned by Mr K Garcia , who acquired a basement apartment in Romford in November 1996. The question was if we could shed any light on how much (approximately) premium would likely be for a ninety year extension to my lease. Comparable residencies in Romford with 100 year plus lease were valued about £200,000. The average amount of ground rent was £50 billed monthly. The lease terminated in 2103. Having 78 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 plus 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 unexpired term was 57.5 years.