The re-sale value of a leasehold property in Romford depends on how many years the lease has remaining. If it is close to or fewer than eighty years you should envisage problems on re-sale, so it is recommended to arrange for the lease to be extended before purchasing. It is preferable to commence the process of extending the lease is when the lease still has 82 years to run so that all matters can be finalised in advance of the eighty year threshold. Current legislation entitles Romford qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus an additional term of ninety years. The intention of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Engaging our service will provide you enhanced control over the value of your Romford leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Last October Jason, came seriously close to the eighty-year mark with the lease on his garden flat in Romford. In buying his property two decades ago, the lease term was of minimal bearing. by good luck, he noticed he would soon be paying an escalated premium for a lease extension. Jason extended the lease just under the wire in January. Jason and the landlord eventually agreed on sum of £5,000 . If he not met the deadline, the amount would have escalated by at least £1,050.
Dr Natalie Cook moved into a recently refurbished flat in Romford in September 2009. We are asked if we could approximate the price could be to extend the lease by ninety years. Identical properties in Romford with a long lease were valued about £166,800. The mid-range ground rent payable was £50 billed every twelve months. The lease elapsed in 2076. Considering the 50 years unexpired we calculated the compensation to the landlord to extend the lease to be within £32,300 and £37,400 plus fees.
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 affected 1 flat. The unexpired term as at the valuation date was 57.5 years.