As the length of the unexpired term of a Downton domestic lease decreases so does its value and therefore the value of your property. Where the residual term has, more than 100 years to run then this decrease may be fractional that being said there will become a stage when a lease has under than eighty years remaining as part of the premium you will incur is what is termed as a marriage value. This could increase markedly the cost. It is the main reason why you should consider extending without delay. Many flat owners in Downton will qualify for this right; that being said a lawyer can advise whether you are eligible to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 35 years left, 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The lawyers that we work with procure Downton 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 conveyancing solicitor we work with provide it.
Following lengthy negotiations with the freeholder of her purpose-built apartment in Downton, Jennifer started the lease extension process as the 80 year threshold was swiftly nearing. The legal work was finalised in November 2011. The freeholder’s fees were negotiated to under 500 pounds.
Last Summer we were e-mailed by Mr Theo Rivera , who acquired a newly refurbished flat in Downton in September 2005. We are asked if we could shed any light on how much (roughly) premium could be for a 90 year extension to my lease. Identical homes in Downton with an extended lease were in the region of £254,200. The average ground rent payable was £60 collected annually. The lease ran out in 2076. Considering the 51 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £43,700 and £50,600 not including costs.
In 2014 we were contacted by Dr U Lefèvre who, having was assigned a lease of a ground floor flat in Downton in January 1998. We are asked if we could approximate the price could be for a 90 year extension to my lease. Identical flats in Downton with a long lease were in the region of £210,600. The average amount of ground rent was £45 collected every twelve months. The lease ended in 2087. Taking into account 62 years outstanding we approximated the compensation to the landlord for the lease extension to be between £18,100 and £20,800 exclusive of legals.