Chances are that where you own a flat in Darley Abbey you actually own a long leasehold interest over your property
Leasehold properties in Darley Abbey with over one hundred years outstanding 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 circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
The conveyancing solicitors that we work with procure Darley Abbey 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 lawyer we work with provide it.
In recent months Michael, started to get close to the eighty-year threshold with the lease on his one bedroom flat in Darley Abbey. Having purchased his property two decades ago, the unexpired term was of minimal relevance. As luck would have it, he became aware that he needed to take steps soon on a lease extension. Michael arranged for a lease extension just in the nick of time in June. Michael and the freeholder in the end agreed on an amount of £5,500 . If he had missed the deadline, the amount would have escalated by a minimum £950.
Last year we were e-mailed by Dr Kai Bertrand , who acquired a purpose-built apartment in Darley Abbey in November 1995. We are asked if we could shed any light on how much (roughly) price would be for a 90 year extension to my lease. Comparative flats in Darley Abbey with a long lease were worth £189,000. The average ground rent payable was £55 collected per annum. The lease finished on 28 November 2079. Taking into account 53 years left we calculated the premium to the freeholder to extend the lease to be between £28,500 and £33,000 exclusive of professional charges.
Last month we were phoned by Ms Isabelle Wood , who was assigned a lease of a garden flat in Darley Abbey in November 2004. The dilemma was if we could shed any light on how much (approximately) premium would be to prolong the lease by ninety years. Similar premises in Darley Abbey with 100 year plus lease were in the region of £290,000. The average ground rent payable was £45 collected every twelve months. The lease termination date was in 2099. Considering the 73 years remaining we calculated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of professional charges.