Unfortunately that a Royston residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Royston property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips lower than 80 years - otherwise a higher amount will be payable. The majority of leasehold owners in Royston will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your lawyer from beginning to end of the formalities.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Yorkshire 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. |
Regardless of whether you are a tenant or a landlord in Royston,the lease extension experts 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 Royston valuers.
Two years ago Harrison, started to get near to the eighty-year mark with the lease on his ground floor apartment in Royston. Having purchased his property two decades ago, the length of the lease was of no relevance. Thankfully, he realised he would imminently be paying an inflated amount for Extending the lease. Harrison was able to extend his lease at the eleventh hour in June. Harrison and the freeholder via the management company eventually agreed on a premium of £6,000 . If the lease had dipped below eighty years, the amount would have gone up by a minimum £900.
Mr D Sharif acquired a basement apartment in Royston in March 2005. The question was if we could estimate the compensation to the landlord would likely be to extend the lease by a further 90 years. Comparable flats in Royston with an extended lease were valued about £257,800. The average amount of ground rent was £65 invoiced every twelve months. The lease came to a finish in 2090. Given that there were 65 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £18,100 and £20,800 exclusive of fees.
Last Christmas we were approach by Mr and Mrs. L Wood , who took over the lease of a studio flat in Royston in June 2005. The question was if we could shed any light on how much (roughly) price would be to prolong the lease by ninety years. Identical homes in Royston with 100 year plus lease were in the region of £196,400. The average amount of ground rent was £55 collected monthly. The lease ran out on 5 September 2079. Having 54 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £34,200 and £39,600 not including expenses.