Danescourt 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 the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Danescourt residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Danescourt you should check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| 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; |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Danescourt,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Danescourt valuers.
Last Spring Harrison, came very near to the eighty-year threshold with the lease on his studio apartment in Danescourt. In buying his property two decades ago, the lease term was of minimal concern. Luckily, it dawned on him that he would imminently be paying an inflated amount for a lease extension. Harrison was able to extend his lease at the eleventh hour in January. Harrison and the freeholder subsequently settled on a premium of £5,500 . If he not met the deadline, the amount would have escalated by at least £925.
Last Summer we were e-mailed by Mr and Mrs. C Simon , who acquired a garden apartment in Danescourt in March 2011. We are asked if we could shed any light on how much (approximately) price could be to extend the lease by 90 years. Similar residencies in Danescourt with a long lease were valued about £290,000. The average ground rent payable was £45 collected monthly. The lease lapsed on 23 November 2099. Considering the 73 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including fees.
Mrs Alexandra Gómez completed a studio flat in Danescourt in September 1996. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by ninety years. Identical flats in Danescourt with 100 year plus lease were worth £240,600. The average ground rent payable was £60 collected yearly. The lease expired on 22 September 2088. Considering the 62 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £21,900 and £25,200 exclusive of legals.