As the length of the unexpired term of a Royton residential lease diminished so does its value and therefore the value of your property. Where the residual term has, more than one hundred years remaining then this decrease may be fractional nevertheless there will become a point in time when a lease has under than 80 years left as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main rational as to why you should consider extending sooner than later. Many flat owners in Royton will meet the qualifying criteria; however a lawyer can confirm if you qualify to extend your lease. In limited situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
Leasehold properties in Royton with over one hundred 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 home. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges justify 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with undertake 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 conveyancing solicitor we work with provide it.
In recent months Felix, started to get near to the 80-year threshold with the lease on his leasehold flat in Royton. Having purchased his home twenty years ago, the unexpired term was of minimal concern. Fortunately, he noticed he needed to take steps soon on Extending the lease. Felix was able to extend his lease at the eleventh hour last March. Felix and the landlord subsequently agreed on sum of £6,000 . If he not met the deadline, the price would have escalated by at least £1,000.
Last month we were contacted by Mrs S Lefèvre , who moved into a one bedroom flat in Royton in March 1999. The question was if we could approximate the premium would likely be for a ninety year lease extension. Comparative premises in Royton with an extended lease were valued about £225,800. The mid-range ground rent payable was £60 collected monthly. The lease lapsed on 22 July 2086. Given that there were 60 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £25,700 and £29,600 plus legals.
In 2010 we were called by Mr and Mrs. O Watson who, having owned a one bedroom apartment in Royton in April 2002. The question was if we could approximate the premium would likely be to prolong the lease by 90 years. Identical residencies in Royton with an extended lease were in the region of £210,000. The mid-range ground rent payable was £50 invoiced yearly. The lease lapsed in 2106. Given that there were 80 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of costs.