The only way is down when it comes to Downe lease terms. Downe flats that have a lease term lower than eighty years will reduce in value at a rapid rate, and the cost of extending your lease will go up.
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 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. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
The lawyers that we work with procure Downe 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 conveyancer we work with provide it.
In the wake of 6 months of protracted discussions with the freeholder of her one bedroom flat in Downe, Leah started the lease extension process just as her lease was approaching the all-important eighty-year threshold. The legal work completed in February 2005. The landlord’s fees were restricted to approximately six hundred GBP.
Last September we were approach by Dr Mason Gray , who was assigned a lease of a first floor flat in Downe in October 1999. We are asked if we could approximate the premium could be for a ninety year lease extension. Identical homes in Downe with a long lease were worth £181,600. The average amount of ground rent was £55 billed yearly. The lease finished on 28 March 2078. Taking into account 52 years as a residual term we calculated the premium to the landlord to extend the lease to be between £30,400 and £35,200 not including fees.
An example of a Lease Extension decision for a Downe residence is 1 Southlands Court Southlands Road in September 2013. The Leasehold Valuation Tribunal determined that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 was £30,541 This case was in relation to 1 flat. The number of years remaining on the existing lease(s) was 50.57 years.