On the balance of probabilities if you own a flat in Denbigh you actually own a long leasehold interest over your property
Leasehold premises in Denbigh with in excess of 100 years remaining on the lease are sometimes 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 estate charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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 |
| 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. |
Regardless of whether you are a tenant or a freeholder in Denbigh,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Denbigh valuers.
18 months ago Freddie, started to get close to the 80-year threshold with the lease on his garden flat in Denbigh. In buying his property two decades ago, the unexpired term was of little importance. Thankfully, it dawned on him that he would imminently be paying an inflated amount for a lease extension. Freddie was able to extend his lease just under the wire in May. Freddie and the landlord subsequently settled on an amount of £5,000 . If the lease had gone lower than 80 years, the sum would have increased by a minimum £850.
In 2014 we were called by Mr Jude Gunderson who, having purchased a purpose-built flat in Denbigh in January 2007. The question was if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Comparable homes in Denbigh with a long lease were in the region of £210,000. The average ground rent payable was £50 billed monthly. The lease termination date was in 2105. Taking into account 80 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 plus fees.
Last Summer we were called by Mr M Taylor , who completed a studio apartment in Denbigh in March 2002. We are asked if we could approximate the premium would be to extend the lease by 90 years. Identical residencies in Denbigh with a long lease were valued around £280,000. The average amount of ground rent was £45 invoiced yearly. The lease lapsed in 2094. Taking into account 69 years unexpired we calculated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 not including professional charges.