Downe leases on residential properties are gradually losing value. if your lease has in the region of ninety years remaining, you should start considering the need for a lease extension. It is important to recognise that it is that it is financially advisable for your lease extension to be in place before the term of the existing lease drops lower than eighty years - otherwise a higher premium will be due. Leasehold owners in Downe will mostly qualify for a lease extension; however It would be wise to check with a conveyancing solicitor to confirm if you qualify. In some situations you may not qualify. There are also strict timetables and procedures to comply with once the process is initiated so it’s prudent to be guided by a conveyancing solicitor during the process.
Leasehold premises in Downe with more than 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges justify it.
|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;
|National Westminster Bank||Mortgage term plus 30 years. For a Lifetime Mortgage, the term must be no less than 150 years minus the age of the Borrower.|
|TSB||Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.|
|Royal Bank of Scotland||Mortgage term plus 30 years. For a Lifetime Mortgage, the term must be no less than 150 years minus the age of the Borrower.|
|Virgin||85 years at the time of completion. If it's less, we require it to be extended on or before completion.|
Irrespective of whether you are a tenant or a landlord in Downe,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Downe valuers.
Jude was the the leasehold owner of a conversion apartment in Downe on the market with a lease of a few days over 61 years unexpired. Jude on an informal basis contacted his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Jude to invoke his statutory right. Jude procured expert legal guidance and was able to make an informed judgement and handle with the matter and readily saleable.
In 2011 we were called by Mr J Michel who, having owned a one bedroom flat in Downe in January 1998. The dilemma was if we could approximate the price could be for a ninety year lease extension. Identical premises in Downe with a long lease were worth £208,600. The mid-range ground rent payable was £60 billed monthly. The lease lapsed in 2079. Taking into account 57 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £30,400 and £35,200 exclusive of fees.
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 related to 1 flat. The number of years remaining on the existing lease(s) was 50.57 years.