Romiley leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Romiley tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Romiley you would be well advised to check if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Romiley with over 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | 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. |
Engaging our service will provide you increased control over the value of your Romiley leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year Lucas, came precariously near to the 80-year threshold with the lease on his one bedroom flat in Romiley. In buying his property two decades ago, the unexpired term was of no interest. Thankfully, he became aware that he needed to take action soon on Extending the lease. Lucas was able to extend his lease at the eleventh hour in June. Lucas and the freeholder via the management company eventually settled on an amount of £6,000 . If the lease had gone to less than 80 years, the figure would have become more costly by at least £950.
In 2011 we were e-mailed by Dr Isabelle Mercier who, having acquired a purpose-built apartment in Romiley in June 2011. We are asked if we could estimate the price would likely be for a 90 year extension to my lease. Comparative flats in Romiley with 100 year plus lease were worth £183,600. The mid-range ground rent payable was £65 invoiced every twelve months. The lease expired in 2082. Having 57 years outstanding we approximated the compensation to the landlord to extend the lease to be within £28,500 and £33,000 exclusive of expenses.
Mr and Mrs. Y David bought a first floor apartment in Romiley in March 2010. The dilemma was if we could shed any light on how much (roughly) price would be for a 90 year lease extension. Comparable properties in Romiley with 100 year plus lease were worth £245,000. The average ground rent payable was £50 collected monthly. The lease elapsed in 2093. Taking into account 68 years as a residual term we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus fees.