Darwen leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Darwen residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Darwen you should see if your lease has between 70 and 90 years left. There are good reasons why a Darwen flat owner with a lease having around eighty years unexpired should take steps to make sure that a lease extension is actioned without delay
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service gives you enhanced control over the value of your Darwen leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Jasper owned a studio flat in Darwen on the market with a lease of just over 59 years left. Jasper informally contacted his landlord a well known local-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent initially set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Jasper to invoke his statutory right. Jasper obtained expert legal guidance and secured satisfactory resolution informally and readily saleable.
Mr and Mrs. K Bennett took over the lease of a purpose-built apartment in Darwen in January 2012. The dilemma was if we could estimate the compensation to the landlord could be for a ninety year lease extension. Comparable flats in Darwen with 100 year plus lease were valued about £200,800. The mid-range ground rent payable was £65 collected every twelve months. The lease finished in 2084. Given that there were 60 years outstanding we estimated the compensation to the landlord to extend the lease to be between £20,900 and £24,200 plus professional charges.
Last Autumn we were e-mailed by Mrs H Richardson , who completed a newly refurbished apartment in Darwen in July 1996. We are asked if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparable premises in Darwen with a long lease were valued about £260,000. The average amount of ground rent was £50 invoiced every twelve months. The lease came to a finish in 2095. Given that there were 71 years outstanding we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 not including expenses.