The re-sale value of a leasehold property in Downton depends on how many years the lease has remaining. If it is close to or less than 80 years you should anticipate difficulties on re-sale, so it is advisable to arrange for the lease to be extended before purchasing. It is preferable to start the process of extending the lease is when the lease still has 82 years unexpired so that formalities can be addressed well before the eighty year mark. Current legislation entitles Downton qualifying lessees to acquire a new lease which will be for the current unexpired lease term plus a further term of ninety years. The reason of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Regardless of whether you are a tenant or a freeholder in Downton,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Downton valuers.
In 2014 Benjamin, started to get near to the eighty-year mark with the lease on his leasehold flat in Downton. In buying his home two decades ago, the lease term was of little bearing. Luckily, it dawned on him that he needed to take steps soon on Extending the lease. Benjamin arranged for a lease extension just ahead of time last August. Benjamin and the freeholder via the managing agents ultimately agreed on the final figure of £6,000 . If he had missed the deadline, the figure would have become more exhorbitant by a minimum £975.
In 2009 we were phoned by Mr and Mrs. A Allen who, having took over the lease of a recently refurbished apartment in Downton in June 1995. We are asked if we could shed any light on how much (roughly) price would be to prolong the lease by an additional years. Comparable properties in Downton with a long lease were worth £203,200. The average amount of ground rent was £65 billed per annum. The lease terminated on 13 June 2087. Considering the 61 years unexpired we calculated the premium to the landlord to extend the lease to be between £20,000 and £23,000 plus expenses.
Last year we were called by Mrs Gemma Kelly , who acquired a garden apartment in Downton in April 2001. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by an additional years. Comparative homes in Downton with a long lease were valued about £260,000. The average ground rent payable was £50 invoiced per annum. The lease ran out on 6 February 2098. Taking into account 72 years remaining we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 not including professional charges.