When it comes to domestic leasehold property in Downe, you are actually buying an entitlement to reside in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you should think about extending the lease sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly particularly once there are less than eighty years left. Residents in Downe with a lease drawing near to 81 years unexpired should seriously consider extending it sooner rather than later. Once the lease term has less than 80 years outstanding, under the current statute the landlord is entitled to calculate and charge a larger premium, based on a technical multiplication, known as “marriage value” which is due.
Leasehold properties in Downe with more than 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service will provide you better control over the value of your Downe leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to lengthy negotiations with the landlord of her purpose-built flat in Downe, Jasmine started the lease extension process as the 80 year threshold was rapidly approaching. The lease extension completed in November 2011. The freeholder’s costs were kept to an absolute minimum.
In 2011 we were e-mailed by Mr Oliver Díaz who, having took over the lease of a garden apartment in Downe in June 2005. We are asked if we could approximate the premium would likely be for a ninety year lease extension. Comparable residencies in Downe with an extended lease were valued around £248,000. The average amount of ground rent was £65 collected quarterly. The lease terminated on 5 March 2087. Given that there were 63 years unexpired we calculated the premium to the freeholder to extend the lease to be within £20,000 and £23,000 not including professional charges.
An example of a Lease Extension case for a Downe flat 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 affected 1 flat. The unexpired term was 50.57 years.