Unfortunately that a Ditchling 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 early years due to the reduction being disguised by increases in the Ditchling property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If the number of years remaining falls under 80 years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of flat owners in Ditchling will be able to extend under the legislation; however a lawyer should be able to clarify if you qualify for an extension. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer for the duration of the process.
It is generally accepted that a property with more than 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the property will be worth the same as 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
The lawyers that we work with undertake Ditchling 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.
After protracted negotiations with the freeholder of her basement flat in Ditchling, Kayleigh commenced the lease extension process just as the lease was coming close to the all-important eighty-year mark. The lease extension was concluded in February 2006. The landlord’s fees were negotiated to below 550 pounds.
In 2013 we were called by Ms Zoe Bonnet who, having completed a first floor flat in Ditchling in February 2004. The dilemma was if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Comparative properties in Ditchling with a long lease were valued about £198,400. The average amount of ground rent was £65 invoiced every twelve months. The lease lapsed in 2084. Considering the 59 years left we estimated the premium to the landlord to extend the lease to be between £21,900 and £25,200 exclusive of fees.
Last year we were contacted by Mr and Mrs. G Norbert , who took over the lease of a studio apartment in Ditchling in March 2004. The question was if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparative flats in Ditchling with 100 year plus lease were in the region of £255,000. The average amount of ground rent was £50 collected monthly. The lease elapsed in 2095. Taking into account 70 years outstanding we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 plus expenses.