It’s an underpublicised truth that a Denton residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Denton property prices.Once your lease nears 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips under 80 years - otherwise a higher premium will be due. The majority of flat owners in Denton will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer for the duration of the formalities.
It is generally considered that a property with over 100 years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 |
Irrespective of whether you are a tenant or a landlord in Denton,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Denton valuers.
Last October Milo, came dangerously near to the 80-year threshold with the lease on his one bedroom flat in Denton. Having bought his home two decades ago, the length of the lease was of no bearing. Thankfully, he recognised he would soon be paying an inflated amount for a lease extension. Milo arranged for a lease extension just ahead of time last April. Milo and the landlord in the end settled on an amount of £5,500 . If he had missed the deadline, the premium would have increased by a minimum £1,000.
Mr and Mrs. E Ward took over the lease of a ground floor flat in Denton in March 2006. The dilemma was if we could estimate the premium could be to extend the lease by 90 years. Comparative residencies in Denton with 100 year plus lease were worth £270,000. The mid-range amount of ground rent was £55 invoiced every twelve months. The lease concluded in 2100. Having 75 years outstanding we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 not including fees.
In 2013 we were contacted by Mr and Mrs. B Ricardo who, having took over the lease of a studio flat in Denton in September 1997. We are asked if we could estimate the premium would be for a 90 year lease extension. Comparative homes in Denton with 100 year plus lease were valued around £168,800. The mid-range amount of ground rent was £60 invoiced every twelve months. The lease came to a finish in 2080. Having 55 years as a residual term we calculated the premium to the landlord to extend the lease to be within £31,400 and £36,200 not including legals.