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Top reasons for Datchet lease extension


Main reasons to start your Datchet lease extension today:

Increase your lease and increase your Datchet property value

When it comes to domestic leasehold property in Datchet, you are actually buying a right to reside in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may consider extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately greater notably when there are less than 80 years remaining. Residents in Datchet with a lease drawing near to 81 years left should seriously consider extending it sooner rather than later. When a lease has under 80 years remaining, under the current Act the landlord is entitled to calculate and charge a larger amount, assessed on a technical multiplication, strangely termed as “marriage value” which is due.

Datchet property with a lease extension has roughly the same value as a freehold

It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.

Mortgage lenders may decide not to finance a property with a short lease

Most mortgage companies require a lengthy amount of time remaining on any leasehold property before they will consider providing a mortgage on it. Regardless of whether you require a mortgage, you should bear in mind that it is reasonable to assume that someone wanting to purchase your property in the future might well do, so if they are unable to secure a mortgage, then the value of your property will likely be adversely impacted. In the last decade many mortgage lenders have increased the required minimum lease length that they are willing to lend on

Lender Requirement
Leeds Building Society 85 years remaing from the start of the mortgage.
Lloyds TSB Scotland Minimum 70 years from the date of the mortgage.
Nationwide Building Society - Our minimum unexpired lease term is 55 years.
- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).

Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:

Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer

New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer

Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.

SECOND HAND PROPERTIES

Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 55 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period is less than or equal to 5 years

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 55 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial, etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI

NEW BUILD PROPERTIES (includes office conversions)

Unacceptable - advise Issuing Office (Will be declined)
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house (does not apply to Shared Ownership)
- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn Ground Rent (Annual Rent) charges

For the avoidance of doubt, any New Build properties completed but not sold pre-30 June 2022 will only be acceptable if the Lease conforms to the above guidance.

* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years.

Lease Extensions

We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to Issuing Office.
TSB Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.
Royal Bank of Scotland Mortgage term plus 30 years. For a Lifetime Mortgage, the term must be no less than 150 years minus the age of the Borrower.

What makes us experts in Datchet lease extensions?

Retaining our service will provide you increased control over the value of your Datchet leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.

Datchet Lease Extension Example Cases:

Thomas, Datchet, Berkshire

Last Spring Thomas, started to get near to the 80-year mark with the lease on his first floor flat in Datchet. Having bought his property two decades ago, the lease term was of no interest. Thankfully, he noticed he needed to take action soon on Extending the lease. Thomas extended the lease just under the wire last May. Thomas and the freeholder in the end agreed on the final figure of £5,000 . If the lease had descended lower than 80 years, the price would have increased by a minimum £900.

Datchet case:

In 2013 we were called by Mr and Mrs. R Bertrand who, having took over the lease of a purpose-built flat in Datchet in July 2010. The dilemma was if we could estimate the premium would likely be for a ninety year extension to my lease. Identical premises in Datchet with 100 year plus lease were valued around £250,400. The mid-range amount of ground rent was £65 collected every twelve months. The lease ran out in 2086. Having 64 years left we estimated the premium to the landlord for the lease extension to be within £19,000 and £22,000 plus costs.

Datchet case:

Mr and Mrs. J Peterson bought a recently refurbished apartment in Datchet in June 2005. The question was if we could shed any light on how much (roughly) premium would likely be to extend the lease by a further 90 years. Comparable premises in Datchet with 100 year plus lease were valued around £189,000. The average amount of ground rent was £55 collected quarterly. The lease elapsed in 2075. Taking into account 53 years remaining we calculated the premium to the landlord to extend the lease to be within £28,500 and £33,000 not including costs.