As the the remaining lease term of a Darley Abbey domestic lease decreases so does its value and therefore the value of your property. If the lease has, over one hundred years to run then this decrease may be negligible nevertheless there will become a point in time when a lease has less than 80 years remaining as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the primary rational as to why you should extend the lease without delay. Many flat owners in Darley Abbey will qualify for this right; nevertheless a lawyer can advise whether you qualify to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Regardless of whether you are a tenant or a freeholder in Darley Abbey,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Darley Abbey valuers.
Subsequent to unsuccessful discussions with the landlord of her studio flat in Darley Abbey, Hannah started the lease extension process just as her lease was approaching the crucial 80-year mark. The transaction was finalised in November 2014. The landlord’s charges were negotiated to under 500 GBP.
Mr and Mrs. B Johnson took over the lease of a purpose-built flat in Darley Abbey in April 1999. The dilemma was if we could approximate the price would likely be to extend the lease by an additional years. Similar flats in Darley Abbey with a long lease were valued about £216,000. The average ground rent payable was £60 collected per annum. The lease lapsed on 12 March 2084. Taking into account 58 years remaining we approximated the premium to the freeholder for the lease extension to be within £28,500 and £33,000 exclusive of fees.
In 2014 we were called by Mr and Mrs. B Bennett who, having completed a first floor flat in Darley Abbey in January 1998. We are asked if we could estimate the premium would likely be for a ninety year extension to my lease. Identical homes in Darley Abbey with 100 year plus lease were valued around £205,000. The average amount of ground rent was £50 collected monthly. The lease terminated in 2104. Considering the 78 years left we calculated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 not including fees.