Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will usually be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Romiley. Clearly, the term of lease left shortens over time. This may pass by relatively unnoticed when the property needs to be disposed of or refinanced. The fewer the years remaining the lower the value of the property and the more expensive it will be to extend the lease. Eligible long lease owners in Romiley have the legal entitlement to extend the lease for an additional 90 years under the 1993 Leasehold Reform Act. Do give due deliberation before putting off your Romiley lease extension. Holding off the cost now likely increases the price you will ultimately have to pay to extend your lease
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years left, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 Romiley 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 are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Arthur, started to get near to the eighty-year threshold with the lease on his garden flat in Romiley. Having purchased his property two decades ago, the unexpired term was of minimal bearing. As luck would have it, it dawned on him that he would soon be paying an inflated amount for a lease extension. Arthur arranged for a lease extension just under the wire in June. Arthur and the landlord in the end settled on a premium of £5,500 . If he failed to meet the deadline, the price would have gone up by a minimum £1,150.
In 2009 we were phoned by Mr and Mrs. S Gray who, having owned a basement apartment in Romiley in February 2010. The dilemma was if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Similar flats in Romiley with 100 year plus lease were worth £270,000. The average ground rent payable was £55 collected quarterly. The lease concluded on 28 August 2101. Given that there were 75 years left we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 plus expenses.
In 2011 we were called by Dr H Pérez who, having purchased a first floor flat in Romiley in March 2006. We are asked if we could approximate the compensation to the landlord could be for a ninety year lease extension. Similar flats in Romiley with an extended lease were valued around £168,800. The mid-range amount of ground rent was £60 invoiced monthly. The lease lapsed on 7 March 2081. Taking into account 55 years left we estimated the premium to the landlord to extend the lease to be between £31,400 and £36,200 exclusive of costs.