With a domestic leasehold property in Denbigh, you effectively rent it for a certain amount of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease becomes disproportionately more expensive particularly once there are less than eighty years remaining. Residents in Denbigh with a lease approaching 81 years remaining should seriously think of extending it sooner rather than later. When the lease term has below eighty years remaining, under the relevant statute the freeholder is entitled to calculate and demand a larger premium, assessed on a technical computation, strangely termed as “marriage value” which is payable.
It is generally accepted that a residential leasehold with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the property will be equivalent in value to a freehold for many years in the future.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you increased control over the value of your Denbigh leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Arthur, came precariously near to the eighty-year threshold with the lease on his studio flat in Denbigh. In buying his home two decades ago, the unexpired term was of little importance. Luckily, it dawned on him that he would imminently be paying an escalated premium for Extending the lease. Arthur was able to extend his lease at the eleventh hour last March. Arthur and the landlord ultimately agreed on a premium of £5,000 . If the lease had slipped below eighty years, the figure would have gone up by at least £1,075.
In 2014 we were phoned by Mr and Mrs. P Wright who, having moved into a purpose-built flat in Denbigh in February 2001. The question was if we could approximate the premium could be for a 90 year extension to my lease. Similar homes in Denbigh with 100 year plus lease were in the region of £280,000. The average ground rent payable was £45 invoiced every twelve months. The lease terminated on 25 July 2095. Taking into account 69 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 plus professional charges.
Mr and Mrs. M Murphy acquired a studio flat in Denbigh in January 2011. The dilemma was if we could estimate the premium could be to prolong the lease by an additional years. Similar properties in Denbigh with 100 year plus lease were in the region of £216,000. The average ground rent payable was £60 billed every twelve months. The lease concluded on 25 November 2084. Having 58 years remaining we estimated the premium to the freeholder to extend the lease to be between £28,500 and £33,000 plus legals.