Owning a apartment usually means owning a lease of the property, which has a set term of years. This lease will normally be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Darley Abbey. Clearly, the length of lease remaining shortens over time. This may pass by relatively unnoticed when the residence has to be sold or refinanced. The fewer the years remaining the less it is worth and the more expensive it will be to procure a lease extension. Qualifying leaseholders in Darley Abbey have the legal entitlement to extend the lease for a further 90 years in accordance with the 1993 Leasehold Reform Act. Please give due consideration before putting off your Darley Abbey lease extension. Holding off the cost now likely increases the price you will eventually have to pay to extend your lease
Leasehold residencies in Darley Abbey with in excess of one hundred years remaining 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 reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a freeholder in Darley Abbey,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Darley Abbey valuers.
Last October Daniel, came critically close to the eighty-year threshold with the lease on his first floor flat in Darley Abbey. In buying his property two decades ago, the lease term was of minimal relevance. Thankfully, he became aware that he needed to take action soon on a lease extension. Daniel arranged for a lease extension at the eleventh hour last June. Daniel and the freeholder via the management company subsequently agreed on an amount of £5,500 . If the lease had fallen to less than 80 years, the price would have become more exhorbitant by a minimum £950.
Last Spring we were e-mailed by Dr Luca Norbert , who purchased a studio flat in Darley Abbey in May 1998. The dilemma was if we could estimate the premium would be for a ninety year extension to my lease. Similar homes in Darley Abbey with an extended lease were valued around £223,400. The mid-range ground rent payable was £60 invoiced annually. The lease expired on 9 March 2084. Given that there were 59 years unexpired we calculated the compensation to the landlord for the lease extension to be within £27,600 and £31,800 exclusive of legals.
Mr I White was assigned a lease of a studio flat in Darley Abbey in November 2001. The dilemma was if we could approximate the price would likely be to prolong the lease by 90 years. Comparable homes in Darley Abbey with an extended lease were valued about £205,000. The average amount of ground rent was £50 collected per annum. The lease expired in 2104. Having 79 years remaining we approximated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of professional charges.