The rule of thumb is, all other factors being equal, the shorter the lease the more costly the premium. Qualifying leaseholders in Darwen have the legal entitlement to extend the lease for a further ninety years under the 1993 Leasehold Reform Act. Please think carefully before delaying your Darwen lease extension. Postponing that expense now simply escalates the amount you will ultimately be required to pay for a lease extension.
It is generally accepted that a residential leasehold with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| 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. |
| 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. |
| 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. |
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.
Gabriel was the the leasehold proprietor of a 2 bedroom apartment in Darwen on the market with a lease of fraction over fifty eight years left. Gabriel on an informal basis spoke with his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £100 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Gabriel to exercise his statutory right. Gabriel obtained expert legal guidance and was able to make a more informed decision and handle with the matter and sell the property.
In 2014 we were approached by Dr F Smith who, having was assigned a lease of a garden flat in Darwen in July 1999. We are asked if we could approximate the price would likely be to extend the lease by an additional years. Comparable properties in Darwen with 100 year plus lease were in the region of £210,600. The mid-range amount of ground rent was £45 collected monthly. The lease ran out in 2088. Given that there were 62 years left we approximated the premium to the freeholder to extend the lease to be between £18,100 and £20,800 exclusive of legals.
In 2013 we were contacted by Mr and Mrs. C Laurent who, having purchased a garden apartment in Darwen in March 2003. The question was if we could estimate the premium would likely be for a ninety year lease extension. Identical premises in Darwen with a long lease were worth £265,000. The mid-range amount of ground rent was £50 collected every twelve months. The lease elapsed on 7 September 2099. Taking into account 73 years left we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of professional charges.