Royton leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. It is the case that most Royton 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 Royton you would be well advised to see if your lease has between seventy and ninety years remaining. There are compelling reasons why a Royton flat owner with a lease having around 80 years left should take action to ensure that a lease extension is actioned without delay
Leasehold residencies in Royton with in excess of 100 years unexpired 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 property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges merit 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service will provide you increased control over the value of your Royton leasehold, as your property will be more valuable and marketable 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.
Joseph owned a conversion apartment in Royton on the market with a lease of fraction over 59 years left. Joseph on an informal basis contacted his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £200 yearly. No ground rent would be due on a lease extension were Joseph to invoke his statutory right. Joseph obtained expert advice and secured satisfactory deal without going to tribunal and ending up with a market value flat.
In 2014 we were e-mailed by Mr and Mrs. N Davies who, having moved into a one bedroom flat in Royton in April 1998. The question was if we could shed any light on how much (approximately) premium could be for a 90 year extension to my lease. Comparable residencies in Royton with an extended lease were in the region of £285,000. The average amount of ground rent was £45 invoiced annually. The lease lapsed in 2098. Having 72 years remaining we estimated the premium to the landlord to extend the lease to be within £12,400 and £14,200 not including fees.
Mr and Mrs. H Morgan completed a garden apartment in Royton in April 2000. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by an additional years. Comparable residencies in Royton with 100 year plus lease were in the region of £233,200. The average ground rent payable was £60 collected every twelve months. The lease ran out in 2087. Having 61 years outstanding we estimated the compensation to the landlord to extend the lease to be within £22,800 and £26,400 plus costs.