Unfortunately that a Downend residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Downend property prices.Where your lease has approximately 90 years left, you should start considering a lease extension. If the number of years remaining falls under eighty 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. Marriage value is the amount of extra value that a lease extension will add the property The majority of flat owners in Downend will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer throughout the formalities.
Leasehold properties in Downend with in excess of 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | 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. |
| 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. |
Retaining our service gives you better control over the value of your Downend leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to protracted negotiations with the landlord of her basement apartment in Downend, Rhiannon initiated the lease extension process as the eighty year mark was quickly advancing. The legal work was concluded in May 2006. The landlord’s costs were kept to an absolute minimum.
In 2010 we were contacted by Mr F Watson who, having bought a garden apartment in Downend in March 2005. The question was if we could shed any light on how much (roughly) premium could be for a 90 year lease extension. Comparable residencies in Downend with a long lease were worth £265,200. The average amount of ground rent was £65 invoiced quarterly. The lease lapsed in 2091. Taking into account 66 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £15,200 and £17,600 exclusive of professional charges.
In 2009 we were approached by Mrs G Brown who, having acquired a first floor flat in Downend in March 1996. We are asked if we could estimate the premium would be for a 90 year lease extension. Comparative residencies in Downend with a long lease were valued around £198,800. The average ground rent payable was £55 collected quarterly. The lease elapsed in 2080. Having 55 years left we estimated the compensation to the landlord for the lease extension to be between £33,300 and £38,400 not including professional charges.