Danbury leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Most owners of residential leasehold property in Danbury enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Danbury you would be well advised to check if your lease has between 70 and 90 years left. There are good reasons why a Danbury leaseholder with a lease having around eighty years remaining should take steps to make sure that a lease extension is actioned without delay
Leasehold properties in Danbury with over one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges justify 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 freeholder in Danbury,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Danbury valuers.
Twenty four months ago Mason, started to get near to the 80-year mark with the lease on his one bedroom flat in Danbury. In buying his flat twenty years previously, the length of the lease was of little importance. Fortunately, he realised he would soon be paying an inflated amount for Extending the lease. Mason was able to extend his lease at the eleventh hour last September. Mason and the freeholder in the end settled on an amount of £5,500 . If the lease had gone below 80 years, the figure would have escalated by a minimum £1,075.
In 2014 we were approached by Mr F Alexander who, having purchased a one bedroom apartment in Danbury in February 2000. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year extension to my lease. Similar flats in Danbury with 100 year plus lease were in the region of £255,000. The average amount of ground rent was £50 invoiced yearly. The lease elapsed on 25 June 2095. Given that there were 70 years outstanding we estimated the premium to the freeholder for the lease extension to be within £10,500 and £12,000 not including expenses.
Mr and Mrs. N Clarke took over the lease of a first floor flat in Danbury in September 1999. The dilemma was if we could estimate the premium would likely be for a 90 year lease extension. Comparable flats in Danbury with a long lease were valued around £246,800. The average amount of ground rent was £60 billed per annum. The lease expired in 2075. Having 50 years left we estimated the premium to the freeholder for the lease extension to be between £44,700 and £51,600 plus legals.