Unfortunately that a Downe residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Downe property prices.Once your lease nears 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips below 80 years - otherwise a higher premium will be payable. Most leasehold owners in Downe will be able to extend under the legislation; however a conveyancer will be able to confirm if you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold residencies in Downe with in excess of 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake 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 lawyer we work with provide it.
In 2014 Nathaniel, started to get near to the 80-year threshold with the lease on his two bedroom apartment in Downe. Having bought his flat two decades ago, the unexpired term was of no significance. Fortunately, he became aware that he would soon be paying an escalated premium for a lease extension. Nathaniel arranged for a lease extension just in the nick of time last January. Nathaniel and the freeholder via the managing agents subsequently settled on sum of £5,000 . If he had missed the deadline, the figure would have escalated by a minimum £1,100.
Mrs E Martinez took over the lease of a ground floor apartment in Downe in September 1997. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by an additional years. Comparative premises in Downe with a long lease were worth £250,400. The average ground rent payable was £65 collected annually. The lease elapsed in 2090. Having 64 years unexpired we approximated the compensation to the landlord to extend the lease to be between £19,000 and £22,000 plus fees.
An example of a Lease Extension decision 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 was in relation to 1 flat. The unexpired residue of the current lease was 50.57 years.