Royton leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Royton residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Royton you should see if your lease has between seventy and ninety years left. There are good reasons why a Royton leaseholder with a lease having around 80 years left should take steps to make sure that a lease extension is put in place without delay
Leasehold residencies in Royton with more than 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Royton,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Royton valuers.
Last October Cameron, came dangerously close to the eighty-year mark with the lease on his one bedroom apartment in Royton. Having purchased his flat two decades ago, the lease term was of little significance. Thankfully, he noticed he needed to take action soon on Extending the lease. Cameron arranged for a lease extension just under the wire last August. Cameron and the landlord ultimately settled on a premium of £5,500 . If he not met the deadline, the amount would have increased by at least £1,075.
In 2010 we were e-mailed by Mr and Mrs. E Lewis who, having completed a purpose-built flat in Royton in November 2007. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year lease extension. Similar properties in Royton with an extended lease were worth £201,200. The average ground rent payable was £55 invoiced every twelve months. The lease expired in 2082. Having 56 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £31,400 and £36,200 plus fees.
Last Spring we were approach by Mr Milo Petit , who took over the lease of a one bedroom flat in Royton in March 1997. The dilemma was if we could shed any light on how much (roughly) premium would be for a 90 year lease extension. Identical premises in Royton with a long lease were in the region of £300,000. The mid-range amount of ground rent was £50 collected quarterly. The lease finished in 2102. Considering the 76 years unexpired we approximated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of fees.