For anyone whose Daventry home is held on a long lease, the message is clear – if you ignore the situation, the property will eventually revert to the freeholder, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to procure a lease extension.
It is generally accepted that a residential leasehold with in excess of 100 years remaining is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | 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. |
The conveyancing solicitors that we work with undertake Daventry 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 October Aaron, came very near to the eighty-year mark with the lease on his first floor apartment in Daventry. In buying his flat two decades ago, the unexpired term was of no interest. Luckily, he noticed he needed to take steps soon on Extending the lease. Aaron was able to extend his lease at the eleventh hour last March. Aaron and the freeholder subsequently agreed on the final figure of £5,500 . If the lease had slid to less than eighty years, the premium would have become more exhorbitant by a minimum £925.
Last Christmas we were approach by Dr George James , who acquired a first floor apartment in Daventry in August 2010. We are asked if we could approximate the premium would be for a ninety year extension to my lease. Identical homes in Daventry with 100 year plus lease were valued about £166,400. The mid-range amount of ground rent was £60 collected annually. The lease expired in 2080. Taking into account 54 years remaining we approximated the premium to the freeholder to extend the lease to be within £32,300 and £37,400 not including expenses.
Mr Harrison King took over the lease of a purpose-built flat in Daventry in July 2009. The question was if we could estimate the premium would likely be for a 90 year lease extension. Similar premises in Daventry with a long lease were worth £227,800. The average ground rent payable was £45 collected per annum. The lease finished on 8 August 2091. Taking into account 65 years left we approximated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 plus costs.