It’s an underpublicised certainty that a Downham Market residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Downham Market property prices.Once your lease gets to 85ish years, you need to 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 falls lower than eighty years - otherwise a higher amount will be payable. Most leasehold owners in Downham Market will be able to extend under the legislation; however a lawyer will be able to clarify whether you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer throughout the process.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years remaining, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Coventry Building Society | 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. |
| 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. |
| 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. |
| Yorkshire Building Society | 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. |
The conveyancers that we work with undertake Downham Market 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.
Trailing unsuccessful discussions with the landlord of her garden apartment in Downham Market, Robyn commenced the lease extension process as the eighty year deadline was quickly nearing. The legal work completed in May 2012. The freeholder’s costs were kept to an absolute minimum.
Last Autumn we were approach by Mr and Mrs. B Díaz , who owned a studio flat in Downham Market in May 2003. The question was if we could shed any light on how much (approximately) premium would be for a 90 year lease extension. Comparative properties in Downham Market with 100 year plus lease were worth £166,400. The average amount of ground rent was £60 billed annually. The lease elapsed in 2079. Having 54 years left we approximated the premium to the landlord to extend the lease to be between £32,300 and £37,400 plus costs.
Last Autumn we were contacted by Mr and Mrs. G King , who moved into a ground floor apartment in Downham Market in May 2010. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year lease extension. Comparable premises in Downham Market with 100 year plus lease were valued around £227,800. The mid-range ground rent payable was £45 collected every twelve months. The lease ran out in 2090. Given that there were 65 years remaining we estimated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 exclusive of expenses.