Royton leases on domestic properties are gradually losing value. Where your lease has in the region of 90 years unexpired, you should start considering the need for a lease extension. If lease term falls under 80 years, you will then have to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Leasehold owners in Royton will mostly be legally entitled to a lease extension; however a solicitor should be able confirm your eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to comply with once the process is triggered so it’s prudent to be guided by a conveyancing solicitor during the process.
Leasehold premises in Royton with in excess of 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges warrant it.
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| 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. |
Retaining our service gives you increased control over the value of your Royton leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Leon was the the leasehold proprietor of a high value apartment in Royton being marketed with a lease of fraction over 72 years remaining. Leon on an informal basis spoke with his landlord a well known Bristol-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Leon to invoke his statutory right. Leon procured expert advice and secured an acceptable resolution informally and readily saleable.
In 2010 we were contacted by Dr S Martin who, having bought a basement flat in Royton in May 2009. The dilemma was if we could shed any light on how much (roughly) premium would likely be for a ninety year extension to my lease. Identical residencies in Royton with an extended lease were worth £205,000. The mid-range amount of ground rent was £50 billed quarterly. The lease elapsed in 2105. Taking into account 79 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £7,600 and £8,800 not including legals.
In 2010 we were called by Dr Teddy Garcia who, having moved into a first floor apartment in Royton in January 2004. The question was if we could approximate the compensation to the landlord would be for a 90 year extension to my lease. Comparative properties in Royton with 100 year plus lease were worth £270,000. The mid-range ground rent payable was £65 collected per annum. The lease ended in 2094. Given that there were 68 years remaining we approximated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of costs.