It’s an underpublicised truth that a Darley Abbey residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Darley Abbey property prices.Once your lease gets to 85ish years, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below eighty years - otherwise a higher amount will be payable. Most leasehold owners in Darley Abbey will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
Leasehold residencies in Darley Abbey with over one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service 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. |
| 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. |
| 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 also be not less than 75 years at the outset 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. |
Lease extensions in Darley Abbey can be a difficult process. We recommend you procure professional help from a conveyancer 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 dealing with 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.
In the wake of 9 months of unsuccessful correspondence with the landlord of her purpose-built apartment in Darley Abbey, Kayleigh started the lease extension process as the 80 year deadline was quickly nearing. The legal work was finalised in February 2006. The freeholder’s fees were restricted to below 600 pounds.
Dr M Ali purchased a garden apartment in Darley Abbey in October 2012. We are asked if we could approximate the price would likely be to extend the lease by a further 90 years. Identical homes in Darley Abbey with a long lease were worth £210,000. The average ground rent payable was £50 collected yearly. The lease expired on 7 April 2106. Considering the 80 years as a residual term we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of fees.
Last July we were contacted by Mr and Mrs. F López , who owned a ground floor flat in Darley Abbey in May 1998. The question was if we could estimate the premium would likely be to prolong the lease by a further 90 years. Comparable residencies in Darley Abbey with 100 year plus lease were valued about £280,000. The average amount of ground rent was £45 billed quarterly. The lease concluded in 2095. Considering the 69 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of legals.