Why you should start your Downend lease extension

Why you should start your Downend lease extension today:

Increase your lease and increase your Downend property value

It’s a harsh certainty that a Downend residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Downend property prices.Once your lease nears 85ish years, you need to start considering a lease extension. If the number of years remaining dips below eighty years, you will end up paying half 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 Most leasehold owners in Downend will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer throughout the formalities.

An extended lease has roughly the same value as a freehold

Leasehold properties in Downend with more than one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges warrant it.

Lending institutions may decide not to lend on a short lease

The trend since the credit crunch has been for mortgage companies to tighten lending requirements across the board - this has extended to the property over which the mortgage is to be granted. This has meant the minimum number of years remaining under the lease required by mortgage companies has increased. In the past banks were content with twenty years plus the term of the loan - routinely 50 year leases but those requirements have been chipped away by the requirement for lengthy leases - many use a minimum term of 75 years as a prerequisite.

Get in touch with one of our Downend lease extension solicitors or enfranchisement solicitors

Retaining our service will provide you enhanced control over the value of your Downend leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.

Downend Lease Extension Case Studies:

Ibrahim, Downend, Bristol,

Ibrahim was the the leasehold proprietor of a conversion flat in Downend on the market with a lease of just over 72 years unexpired. Ibrahim informally approached his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £100 per annum. Ordinarily, ground rent would not be payable on a lease extension were Ibrahim to invoke his statutory right. Ibrahim obtained expert advice and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.

Downend case:

Last Autumn we were contacted by Ms I Hill , who purchased a studio flat in Downend in October 2001. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparable properties in Downend with 100 year plus lease were worth £295,000. The mid-range ground rent payable was £45 billed per annum. The lease ran out in 2100. Having 74 years remaining we estimated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 not including expenses.

Downend case:

Ms B Carter took over the lease of a recently refurbished flat in Downend in March 2009. The dilemma was if we could estimate the price could be to extend the lease by 90 years. Similar flats in Downend with a long lease were in the region of £248,000. The average ground rent payable was £65 invoiced per annum. The lease end date was on 6 August 2089. Given that there were 63 years unexpired we approximated the compensation to the landlord to extend the lease to be between £20,900 and £24,200 plus legals.