It’s an underpublicised truth that a Danescourt residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Danescourt property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If the number of years remaining falls under eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of flat owners in Danescourt will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you are eligibility. 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 from beginning to end of the process.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
Retaining our service will provide you enhanced control over the value of your Danescourt leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Felix owned a 2 bedroom apartment in Danescourt being sold with a lease of a little over fifty eight years unexpired. Felix informally approached his landlord being a well known Bristol-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Felix to invoke his statutory right. Felix procured expert legal guidance and secured satisfactory resolution without resorting to tribunal and readily saleable.
In 2009 we were approached by Dr F Clarke who, having took over the lease of a studio flat in Danescourt in May 1997. The dilemma was if we could shed any light on how much (approximately) price could be for a 90 year extension to my lease. Comparative residencies in Danescourt with a long lease were valued about £285,000. The average ground rent payable was £45 collected every twelve months. The lease terminated on 6 November 2097. Having 71 years outstanding we estimated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 not including legals.
Mr and Mrs. M Lambert acquired a first floor flat in Danescourt in May 2004. We are asked if we could shed any light on how much (roughly) price would likely be to extend the lease by ninety years. Identical residencies in Danescourt with 100 year plus lease were in the region of £225,800. The average ground rent payable was £60 collected per annum. The lease came to a finish on 28 October 2086. Given that there were 60 years unexpired we approximated the premium to the landlord for the lease extension to be between £23,800 and £27,400 plus legals.