Unfortunately that a Duston residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Duston property prices.Once your lease nears 85ish years, you need to start considering a lease extension. If lease term slips under 80 years, you will then be required to pay half of the property's 'marriage value' on top of 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 The majority of flat owners in Duston will be able to extend under the legislation; however a conveyancer should be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer for the duration of the process.
Leasehold premises in Duston with more than 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges warrant it.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Engaging our service gives you better control over the value of your Duston leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last Christmas William, started to get close to the 80-year threshold with the lease on his garden apartment in Duston. Having bought his property two decades ago, the length of the lease was of little relevance. by good luck, he noticed he would soon be paying an escalated premium for Extending the lease. William was able to extend his lease at the eleventh hour last January. William and the landlord who owned the flat above eventually agreed on a premium of £5,500 . If he failed to meet the deadline, the price would have become more exhorbitant by a minimum £1,150.
Mrs Nicole Young bought a purpose-built flat in Duston in September 2012. We are asked if we could estimate the price could be to extend the lease by an additional years. Comparative residencies in Duston with a long lease were in the region of £191,400. The mid-range ground rent payable was £55 billed per annum. The lease concluded in 2080. Considering the 54 years left we calculated the compensation to the freeholder for the lease extension to be within £34,200 and £39,600 plus legals.
In 2012 we were approached by Dr Dylan Collins who, having moved into a one bedroom apartment in Duston in January 2002. The dilemma was if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Similar properties in Duston with an extended lease were worth £295,000. The average amount of ground rent was £45 invoiced yearly. The lease finished on 7 January 2100. Considering the 74 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of costs.