On the balance of probabilities if you own a flat in Royton you actually own a long leasehold interest over your property
It is conventional wisdom that a property with over 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors 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.
Andrew was the the leasehold proprietor of a high value apartment in Royton on the market with a lease of a little over 61 years unexpired. Andrew informally contacted his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £150 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Andrew to invoke his statutory right. Andrew procured expert advice and secured satisfactory deal informally and readily saleable.
In 2011 we were e-mailed by Mr and Mrs. B Collins who, having moved into a ground floor apartment in Royton in April 2006. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Comparable properties in Royton with a long lease were valued around £200,000. The average ground rent payable was £50 billed monthly. The lease lapsed on 16 January 2103. Taking into account 77 years remaining we estimated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of legals.
Ms I Smith acquired a one bedroom flat in Royton in November 2012. The question was if we could estimate the price would be for a 90 year lease extension. Comparable residencies in Royton with an extended lease were valued about £260,200. The mid-range amount of ground rent was £65 billed per annum. The lease lapsed on 4 January 2092. Having 66 years unexpired we approximated the compensation to the landlord for the lease extension to be within £16,200 and £18,600 not including costs.