Darwen residential property owned on a long lease is a wasting asset because a leaseholder merely owns the property for a set term.
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 further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with handle Darwen lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Last Christmas Owen, started to get near to the eighty-year mark with the lease on his studio flat in Darwen. Having purchased his property 19 years previously, the lease term was of little significance. Thankfully, he recognised he needed to take steps soon on Extending the lease. Owen was able to extend his lease at the eleventh hour in June. Owen and the freeholder subsequently agreed on the final figure of £5,000 . If he failed to meet the deadline, the amount would have increased by a minimum £850.
Dr Arthur Bonnet bought a purpose-built apartment in Darwen in March 1998. The question was if we could estimate the premium would likely be for a 90 year lease extension. Similar homes in Darwen with a long lease were valued around £208,200. The average ground rent payable was £65 collected annually. The lease lapsed in 2087. Considering the 61 years unexpired we calculated the premium to the freeholder to extend the lease to be within £20,000 and £23,000 not including legals.
Dr Lucy Mitchell bought a garden apartment in Darwen in October 1996. The dilemma was if we could approximate the price would likely be for a ninety year extension to my lease. Identical residencies in Darwen with a long lease were in the region of £260,000. The average amount of ground rent was £50 invoiced annually. The lease concluded on 23 March 2098. Having 72 years unexpired we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus expenses.