Royton leases on domestic properties are gradually losing value. Where your lease has approximately 90 years unexpired, you should start thinking about a lease extension. It is important to recognise that it is that it is desirable for a lease extension to take place before the term of the existing lease drops below eighty years - otherwise a higher premium will be due. Flat owners in Royton will usually be legally entitled to a lease extension; however a solicitor should be able confirm your eligibility. In certain cases you may not qualify. There are prescribed timetables and formalities to follow once the process is triggered so it’s sensible to be guided by a conveyancer during the process.
Leasehold premises in Royton with more than 100 years unexpired on the lease are sometimes regarded as a ‘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 upside in purchasing the reversionary interest unless savings on ground rent and service 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | 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. |
| 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 |
Lease extensions in Royton can be a difficult process. We recommend you get guidance from a lawyer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Royton lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Joshua owned a studio apartment in Royton being sold with a lease of fraction over sixty years outstanding. Joshua on an informal basis spoke with his freeholder being a well known local-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 yearly. Ordinarily, ground rent would not be payable on a lease extension were Joshua to exercise his statutory right. Joshua obtained expert legal guidance and secured an acceptable deal informally and readily saleable.
Last Winter we were approach by Mr and Mrs. L Davies , who owned a studio flat in Royton in February 2012. The question was if we could approximate the price would likely be for a 90 year lease extension. Identical flats in Royton with a long lease were valued about £200,000. The mid-range amount of ground rent was £50 billed monthly. The lease ended in 2102. Having 77 years unexpired we estimated the premium to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of professional charges.
In 2009 we were contacted by Ms P Williams who, having bought a purpose-built apartment in Royton in February 1997. The dilemma was if we could approximate the price would likely be for a ninety year extension to my lease. Comparative properties in Royton with a long lease were in the region of £267,600. The average amount of ground rent was £65 collected every twelve months. The lease ended on 9 May 2092. Given that there were 67 years remaining we calculated the compensation to the freeholder to extend the lease to be between £14,300 and £16,400 exclusive of expenses.