Owning a apartment usually means owning a lease of the property, which has a finite term of years. This lease will usually be granted for a fixed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Daventry. Inevitably, the period of lease left shortens over time. This may slip by relatively unnoticed when the residence has to be sold or refinanced. The fewer the years remaining the less it is worth and the more expensive it will be to extend the lease. Qualifying long lease owners in Daventry have the right to extend the lease for a further 90 years under the 1993 Leasehold Reform Act. You should give due attention before putting off your Daventry lease extension. Holding off that expense now only increases the price you will eventually have to pay for a lease extension
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the property will be worth the same as 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Yorkshire 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. |
Using our service will provide you enhanced control over the value of your Daventry leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Jonathan was the the leasehold owner of a 2 bedroom flat in Daventry on the market with a lease of fraction over sixty years unexpired. Jonathan on an informal basis spoke with his landlord a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Jonathan to invoke his statutory right. Jonathan procured expert advice and secured an acceptable deal informally and readily saleable.
Last Autumn we were approach by Dr Caleb Turner , who bought a studio apartment in Daventry in July 2001. The question was if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by a further 90 years. Identical homes in Daventry with an extended lease were worth £254,200. The average ground rent payable was £60 billed monthly. The lease elapsed on 18 November 2076. Given that there were 51 years unexpired we calculated the premium to the freeholder for the lease extension to be between £43,700 and £50,600 not including professional charges.
In 2014 we were e-mailed by Mr and Mrs. C Hill who, having completed a recently refurbished flat in Daventry in October 2010. The dilemma was if we could approximate the compensation to the landlord would be for a ninety year lease extension. Identical homes in Daventry with 100 year plus lease were worth £210,600. The average amount of ground rent was £45 billed yearly. The lease expired on 27 June 2087. Given that there were 62 years remaining we estimated the compensation to the freeholder to extend the lease to be between £18,100 and £20,800 plus expenses.