Royton residential property owned on a long lease is a wasting asset as the leaseholder only owns the property for a period of years.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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. |
| Coventry Building Society | 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. |
The lawyers that we work with handle Royton lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Two years ago Jake, came critically near to the 80-year mark with the lease on his garden flat in Royton. Having purchased his property two decades ago, the lease term was of little concern. As luck would have it, he recognised he would soon be paying an escalated premium for a lease extension. Jake was able to extend his lease at the eleventh hour in August. Jake and the freeholder via the management company in the end agreed on an amount of £5,500 . If he not met the deadline, the amount would have become more costly by at least £950.
In 2010 we were approached by Dr L Mercier who, having owned a first floor apartment in Royton in April 2008. We are asked if we could approximate the price would likely be to extend the lease by an additional years. Comparative homes in Royton with a long lease were in the region of £240,600. The average amount of ground rent was £65 invoiced per annum. The lease expired in 2088. Taking into account 62 years unexpired we calculated the premium to the freeholder to extend the lease to be within £21,900 and £25,200 not including costs.
In 2013 we were phoned by Mrs Hollie Bernard who, having completed a purpose-built flat in Royton in January 2001. We are asked if we could approximate the premium would be for a ninety year lease extension. Comparable premises in Royton with 100 year plus lease were valued around £181,600. The average ground rent payable was £55 invoiced quarterly. The lease ran out in 2078. Given that there were 52 years as a residual term we calculated the premium to the landlord to extend the lease to be within £30,400 and £35,200 exclusive of fees.