Royton leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. The majority of owners of residential leasehold property in Royton enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Royton you really ought to investigate if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold premises in Royton with more than one hundred years outstanding on the lease are often regarded as a ‘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 to be gained by buying the reversionary interest unless savings on ground rent and service charges warrant it.
| 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; |
| Leeds Building Society | 85 years remaining from the start 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
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 conveyancer we work with provide it.
In 2014 Liam, came perilously near to the 80-year mark with the lease on his basement apartment in Royton. Having bought his property two decades ago, the unexpired term was of little importance. Luckily, he noticed he needed to take action soon on a lease extension. Liam arranged for a lease extension just in the nick of time in January. Liam and the landlord who owned the flat above ultimately agreed on a premium of £5,500 . If he failed to meet the deadline, the amount would have gone up by a minimum £1,150.
Mr and Mrs. T Rogers completed a one bedroom flat in Royton in March 1999. The question was if we could shed any light on how much (approximately) compensation to the landlord would likely be for a 90 year lease extension. Comparable premises in Royton with an extended lease were worth £205,000. The mid-range ground rent payable was £50 invoiced yearly. The lease elapsed in 2104. Taking into account 79 years unexpired we estimated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 plus fees.
Last year we were approach by Ms Phoebe Garcia , who completed a garden apartment in Royton in March 2008. The dilemma was if we could estimate the premium would likely be to extend the lease by a further 90 years. Comparative residencies in Royton with 100 year plus lease were in the region of £275,000. The mid-range ground rent payable was £65 invoiced monthly. The lease terminated in 2093. Taking into account 68 years unexpired we approximated the premium to the landlord for the lease extension to be between £13,300 and £15,400 not including expenses.