As the length of the unexpired term of a Peak District residential lease lessens so does its value and therefore the value of your property. Where the lease has, over 99 years remaining then this decrease may be of little impact nevertheless there will become a stage when a lease has less than eighty years unexpired as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the primary logic behind why you should extend the lease without delay. The majority of flat owners in Peak District will meet the qualifying criteria; nevertheless a lawyer can confirm whether you are eligible for a lease extension. In limited situations you may not qualify, the most common reason being that you have owned the property for under two years.
Leasehold premises in Peak District with over 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle Peak District lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Dexter owned a conversion apartment in Peak District being marketed with a lease of a little over 72 years left. Dexter informally approached his landlord being a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Dexter to exercise his statutory right. Dexter obtained expert legal guidance and secured satisfactory resolution informally and ending up with a market value flat.
Mr J Lefèvre purchased a first floor apartment in Peak District in September 2004. We are asked if we could estimate the price would likely be to extend the lease by a further 90 years. Identical properties in Peak District with a long lease were in the region of £265,000. The average amount of ground rent was £50 invoiced yearly. The lease concluded in 2099. Considering the 74 years left we calculated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 plus fees.
Ms Bethan Lefèvre acquired a studio flat in Peak District in May 1996. We are asked if we could approximate the price would likely be for a 90 year lease extension. Comparative flats in Peak District with 100 year plus lease were worth £166,400. The average ground rent payable was £60 collected quarterly. The lease terminated on 23 June 2079. Taking into account 54 years remaining we estimated the compensation to the landlord for the lease extension to be between £32,300 and £37,400 plus costs.