Didcot leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Didcot residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Didcot you would be well advised to see if your lease has between seventy and ninety years remaining. There are good reasons why a Didcot leaseholder with a lease having around 80 years left should take steps to make sure that a lease extension is effected without delay
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
The lawyers that we work with handle Didcot 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.
During the course of the last few months Daniel, came precariously near to the eighty-year mark with the lease on his studio apartment in Didcot. In buying his home 18 years previously, the lease term was of little bearing. As luck would have it, he noticed he would imminently be paying way over the odds for Extending the lease. Daniel arranged for a lease extension just ahead of time last June. Daniel and the landlord in the end settled on a premium of £5,500 . If the lease had descended lower than eighty years, the figure would have escalated by at least £875.
Last Spring we were contacted by Dr Kai Hall , who was assigned a lease of a one bedroom flat in Didcot in January 2009. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by ninety years. Comparable residencies in Didcot with 100 year plus lease were worth £193,400. The average ground rent payable was £65 invoiced annually. The lease end date was on 3 February 2084. Taking into account 59 years left we calculated the compensation to the landlord for the lease extension to be between £21,900 and £25,200 not including expenses.
Mr and Mrs. G Bennett took over the lease of a one bedroom flat in Didcot in July 1996. We are asked if we could approximate the premium could be to extend the lease by ninety years. Identical premises in Didcot with an extended lease were worth £255,000. The mid-range amount of ground rent was £50 collected annually. The lease lapsed in 2095. Taking into account 70 years outstanding we approximated the compensation to the landlord for the lease extension to be within £10,500 and £12,000 exclusive of costs.