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Why you should start your Darwen lease extension


Top reasons for lease extension now:

Increase your lease and increase your Darwen property value

With a long leasehold premises in Darwen, you are actually purchasing an entitlement to live in a property for a prescribed time frame. In recent years flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you should think about extending the lease sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease becomes disproportionately greater particularly when there are fewer than eighty years left. Residents in Darwen with a lease nearing 81 years remaining should seriously think of extending it as soon as possible. Once the lease term has less than 80 years left, under the relevant statute the landlord can calculate and levy a greater premium, based on a technical multiplication, strangely termed as “marriage value” which is due.

An extended lease has roughly the same value as a freehold

It is conventional wisdom that a property with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the residence will be equivalent in value to a freehold for decades to come.

Mortgage lenders may not issue a mortgage with a short lease

Lenders are tightening their criteria and a meaningful number now expect flats to have at least sixty if not seventy years left at the end of the mortgage. Considering plenty of flats in Darwen were created in the fifties, sixties and seventies as a result many now require lease extensions if they wish to obtain a mortgage.

Lender Requirement
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;
Birmingham Midshires Minimum 70 years from the date of the mortgage.
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.
Virgin 85 years at the time of completion. If it's less, we require it to be extended on or before completion.
Yorkshire 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.

Why use us for your lease extension in Darwen?

Regardless of whether you are a tenant or a freeholder in Darwen,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Darwen valuers.

Darwen Lease Extension Case Summaries:

Felix, Darwen, Lancashire,

Felix was the the leasehold proprietor of a conversion flat in Darwen being marketed with a lease of fraction over 61 years unexpired. Felix on an informal basis contacted his landlord a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £125 annually. Ordinarily, ground rent would not be payable on a lease extension were Felix to exercise his statutory right. Felix obtained expert advice and was able to make an informed decision and handle with the matter and readily saleable.

Darwen case:

Dr F Nelson was assigned a lease of a garden flat in Darwen in April 2012. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by an additional years. Similar properties in Darwen with a long lease were worth £250,000. The average amount of ground rent was £50 invoiced monthly. The lease ended in 2093. Given that there were 69 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 not including professional charges.

Darwen case:

Last June we were phoned by Mr and Mrs. W Turner , who completed a garden apartment in Darwen in August 1995. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a ninety year extension to my lease. Similar homes in Darwen with a long lease were valued around £290,000. The average ground rent payable was £60 billed monthly. The lease ran out on 9 April 2104. Taking into account 80 years outstanding we estimated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 not including costs.