Darwen leases on residential properties are gradually losing value. Where your lease has in the region of 90 years unexpired, you should start considering the need for a lease extension. If lease term dips under 80 years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Flat owners in Darwen will usually qualify for a lease extension; however It would be wise to check with a lawyer to confirm if you qualify. In certain situations you may not qualify. There are prescribed timetables and procedures to comply with once the process is triggered so it’s wise to be guided by a lawyer during the process.
It is generally considered that a residential leasehold with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 undertake Darwen 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.
Aaron was the the leasehold proprietor of a conversion flat in Darwen on the market with a lease of just over 61 years left. Aaron on an informal basis spoke with his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent to start with set at £100 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Aaron to exercise his statutory right. Aaron procured expert advice and secured an acceptable resolution informally and sell the property.
In 2011 we were contacted by Dr Omar Díaz who, having was assigned a lease of a studio apartment in Darwen in March 2010. The question was if we could estimate the premium would likely be for a ninety year lease extension. Similar residencies in Darwen with a long lease were valued about £173,800. The average amount of ground rent was £60 billed yearly. The lease lapsed in 2079. Considering the 55 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £31,400 and £36,200 exclusive of costs.
Dr D Moore bought a purpose-built flat in Darwen in January 2002. The question was if we could shed any light on how much (roughly) premium could be for a 90 year extension to my lease. Comparable homes in Darwen with a long lease were valued about £235,200. The average amount of ground rent was £45 invoiced every twelve months. The lease ran out on 24 November 2090. Considering the 66 years left we calculated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of fees.