The market value of a leasehold property in Danescourt depends on how long the lease has left to run. If it is close to or fewer than eighty years you should expect difficulties on re-sale, so it is recommended to arrange for the lease to be extended before buying. It is preferable to start the process of extending the lease is when the lease still has 82 years to run so that all matters can be finalised ahead of the eighty year mark. Statute entitles Danescourt qualifying lessees to an additional term of 90 years on top of the existing term, at a notional rent (zero ground rent). The intention of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold premises in Danescourt with in excess of 100 years left on the lease are sometimes referred to as ‘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 reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
The lawyers that we work with procure Danescourt 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.
Harry owned a high value apartment in Danescourt being sold with a lease of fraction over 72 years remaining. Harry on an informal basis spoke with his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 yearly. Ordinarily, ground rent would not be payable on a lease extension were Harry to exercise his statutory right. Harry procured expert legal guidance and secured an acceptable deal informally and readily saleable.
Dr E Nguyen purchased a garden flat in Danescourt in October 1995. The dilemma was if we could approximate the compensation to the landlord could be to extend the lease by an additional years. Comparative homes in Danescourt with a long lease were valued around £243,000. The average ground rent payable was £65 billed yearly. The lease ran out on 14 August 2089. Given that there were 63 years remaining we approximated the premium to the landlord to extend the lease to be between £20,000 and £23,000 not including fees.
Mr Noah Richardson took over the lease of a basement flat in Danescourt in March 2011. The question was if we could estimate the premium would be to prolong the lease by a further 90 years. Comparable premises in Danescourt with an extended lease were in the region of £181,600. The average amount of ground rent was £55 invoiced monthly. The lease concluded in 2078. Taking into account 52 years unexpired we calculated the premium to the landlord to extend the lease to be within £30,400 and £35,200 exclusive of expenses.