The nearer a domestic lease in Deanshanger nears to zero years unexpired, the more it reduces the value of the property. If the residual term has, in excess of 99 years to run then this decrease may be negligible nevertheless there will become a point in time when a lease has under than 80 years left as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main logic behind why you should extend the lease without delay. Most flat owners in Deanshanger will qualify for this right; nevertheless a conveyancer will be able to advise whether you qualify to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years left, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| 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. |
| 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. |
| 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 |
The conveyancing solicitors that we work with handle Deanshanger 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 lawyer we work with provide it.
Eliot owned a high value flat in Deanshanger on the market with a lease of a few days over 59 years remaining. Eliot on an informal basis contacted his landlord being a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent to start with set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Eliot to exercise his statutory right. Eliot obtained expert advice and secured satisfactory deal without resorting to tribunal and ending up with a market value flat.
In 2010 we were contacted by Dr Matthew Lefèvre who, having purchased a basement flat in Deanshanger in January 1998. We are asked if we could approximate the price could be for a 90 year extension to my lease. Comparative residencies in Deanshanger with a long lease were in the region of £173,800. The mid-range amount of ground rent was £60 invoiced per annum. The lease ran out on 20 May 2081. Considering the 55 years as a residual term we calculated the premium to the landlord for the lease extension to be between £31,400 and £36,200 exclusive of expenses.
In 2011 we were approached by Mr H Sánchez who, having acquired a one bedroom apartment in Deanshanger in January 2001. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year lease extension. Identical flats in Deanshanger with a long lease were valued about £235,200. The mid-range amount of ground rent was £45 billed per annum. The lease ran out in 2092. Having 66 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 not including costs.