For anyone whose Denbigh property is held on a long lease, our message is clear – if you do nothing, your property will eventually revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to procure a lease extension.
It is generally accepted that a residential leasehold with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years unexpired, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
Irrespective of whether you are a tenant or a freeholder in Denbigh,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Denbigh valuers.
John owned a studio flat in Denbigh on the market with a lease of just over 61 years remaining. John on an informal basis spoke with his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £100 per annum. Ordinarily, ground rent would not be due on a lease extension were John to exercise his statutory right. John obtained expert legal guidance and was able to make an informed decision and deal with the matter and readily saleable.
Mr Felix Nelson took over the lease of a purpose-built apartment in Denbigh in March 1997. We are asked if we could estimate the premium would likely be for a ninety year extension to my lease. Identical homes in Denbigh with 100 year plus lease were valued around £189,000. The average amount of ground rent was £55 invoiced every twelve months. The lease finished in 2078. Considering the 53 years as a residual term we estimated the premium to the landlord for the lease extension to be between £28,500 and £33,000 exclusive of legals.
Last Autumn we were contacted by Dr Ryan Bennett , who took over the lease of a ground floor apartment in Denbigh in November 2007. We are asked if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Identical homes in Denbigh with an extended lease were in the region of £290,000. The mid-range amount of ground rent was £45 invoiced per annum. The lease concluded in 2098. Considering the 73 years left we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of professional charges.