When it comes to domestic leasehold premises in Darwen, you are actually buying an entitlement to reside in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should think about extending the lease sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly notably once there are less than eighty years left. Residents in Darwen with a lease nearing 81 years left should seriously think of extending it as soon as possible. Once a lease has under 80 years outstanding, under the relevant legislation the freeholder is entitled to calculate and demand a larger amount, based on a technical computation, known as “marriage value” which is payable.
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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. |
| 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. |
Retaining our service will provide you enhanced control over the value of your Darwen leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Following unsuccessful discussions with the freeholder of her ground floor flat in Darwen, Hollie initiated the lease extension process as the 80 year threshold was fast coming. The legal work was concluded in April 2009. The freeholder’s costs were restricted to a tad over 500 pounds.
In 2012 we were contacted by Dr Ella Watson who, having acquired a newly refurbished flat in Darwen in September 2001. We are asked if we could estimate the premium could be for a 90 year extension to my lease. Identical properties in Darwen with a long lease were worth £285,000. The mid-range amount of ground rent was £55 invoiced every twelve months. The lease elapsed in 2104. Having 79 years left we approximated the premium to the landlord for the lease extension to be within £13,300 and £15,400 plus expenses.
Mr Y Richardson bought a ground floor apartment in Darwen in May 1995. The question was if we could estimate the price would likely be for a 90 year extension to my lease. Identical residencies in Darwen with a long lease were valued about £193,400. The mid-range ground rent payable was £65 collected quarterly. The lease ran out on 5 November 2084. Having 59 years outstanding we approximated the premium to the landlord to extend the lease to be within £21,900 and £25,200 not including costs.