If you are facing a significant premium because your lease in Darley Abbey has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Main reasons to start your Darley Abbey lease extension today:
Increase your lease and increase your Darley Abbey property value
With a long leasehold premises in Darley Abbey, you are actually buying an entitlement to live in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you should consider extending the lease sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately greater particularly once there are less than eighty years left. Residents in Darley Abbey with a lease nearing 81 years unexpired should seriously think of extending it sooner as opposed to later. When the lease term has less than 80 years left, under the relevant statute the freeholder can calculate and levy a greater amount, based on a technical calculation, known as “marriage value” which is payable.
Darley Abbey property with a lease extension has roughly the same value as a freehold
Leasehold properties in Darley Abbey with over 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
Mortgage lenders may decide not to loan monies on a short lease
Mortgage Lenders vary in their lending criteria. Some draw the line at 75 years left on the lease; others may be prepared to lend with anything in excess seventy years. With less than 60 years, it may be difficult to obtain a mortgage at all.
| Lender |
Requirement
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|---|
| 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
|
| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
|
| Royal Bank of Scotland |
Mortgage term plus 30 years.
|
| Virgin |
85 years at the time of completion. If it's less, we require it to be extended on or before completion.
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Get in touch with one of our Darley Abbey lease extension solicitors or enfranchisement solicitors
Lease extensions in Darley Abbey can be a difficult process. We recommend you obtain guidance from a lawyer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Darley Abbey lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Darley Abbey Lease Extension Example Cases:
Isaac, Darley Abbey, Derbyshire,
Isaac was the the leasehold owner of a conversion flat in Darley Abbey being sold with a lease of just over 61 years outstanding. Isaac on an informal basis spoke with his landlord a well known Bristol-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Isaac to invoke his statutory right. Isaac obtained expert legal guidance and secured an acceptable deal without going to tribunal and ending up with a market value flat.
Darley Abbey case:
In 2014 we were called by Ms Georgia Hall who, having took over the lease of a one bedroom apartment in Darley Abbey in August 2001. We are asked if we could approximate the premium would be for a 90 year lease extension. Similar homes in Darley Abbey with 100 year plus lease were in the region of £248,000. The average amount of ground rent was £65 billed every twelve months. The lease end date was on 18 July 2089. Taking into account 63 years as a residual term we calculated the compensation to the freeholder to extend the lease to be within £20,900 and £24,200 not including expenses.
Darley Abbey case:
Last Christmas we were called by Mr Mason Edwards , who
moved into a one bedroom apartment in Darley Abbey in July 2009. The question was if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by a further 90 years. Identical residencies in Darley Abbey with an extended lease were in the region of £181,600. The mid-range amount of ground rent was £55 collected annually. The lease expired on 9 October 2078. Given that there were 52 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £30,400 and £35,200 exclusive of expenses.