Unfortunately that a Deddington residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Deddington property market.Where your lease has approximately ninety years left, you should start thinking about a lease extension. If the number of years remaining falls below 80 years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Deddington will be able to extend under the legislation; however a lawyer should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
It is generally considered that a property with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years unexpired, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a freeholder in Deddington,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Deddington valuers.
In 2014 Archie, came perilously close to the eighty-year threshold with the lease on his leasehold apartment in Deddington. In buying his property two decades ago, the lease term was of minimal bearing. by good luck, he recognised he needed to take action soon on a lease extension. Archie extended the lease just under the wire in September. Archie and the freeholder subsequently agreed on the final figure of £5,000 . If the lease had slipped to less than 80 years, the price would have gone up by a minimum £1,025.
Last year we were approach by Mr and Mrs. O Bell , who acquired a newly refurbished apartment in Deddington in April 1998. We are asked if we could estimate the price would likely be for a 90 year extension to my lease. Similar flats in Deddington with an extended lease were valued around £227,800. The mid-range ground rent payable was £45 billed monthly. The lease ran out on 11 January 2091. Given that there were 65 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 not including fees.
In 2013 we were contacted by Mrs K Campbell who, having bought a ground floor flat in Deddington in July 2010. We are asked if we could estimate the price could be for a 90 year lease extension. Similar homes in Deddington with an extended lease were worth £270,000. The average ground rent payable was £55 invoiced quarterly. The lease elapsed on 28 April 2102. Considering the 76 years unexpired we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of legals.