Peak District leases on domestic properties are gradually losing value. Where your lease has approximately 90 years left, you should start considering the need for a lease extension. It is important to recognise that it is that it is financially advisable for your lease extension to take place before the term of the current lease falls lower than eighty years - otherwise a higher premium will be due. Leasehold owners in Peak District will usually be legally entitled to a lease extension; however a solicitor will confirm if you qualify. In certain cases you may not be entitled. There are prescribed timetables and steps to comply with once the process is triggered so it’s sensible to be guided by a conveyancer during the process.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
The lawyers that we work with undertake Peak District 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 conveyancer we work with provide it.
In the wake of eight months of protracted discussions with the landlord of her ground floor apartment in Peak District, Mia commenced the lease extension process just as the lease was coming close to the all-important eighty-year threshold. The transaction was finalised in March 2005. The landlord’s charges were negotiated to under 450 GBP.
Last Christmas we were phoned by Mr Lewis Jones , who acquired a one bedroom apartment in Peak District in October 2003. The question was if we could estimate the compensation to the landlord would be to prolong the lease by a further 90 years. Identical properties in Peak District with a long lease were valued around £261,600. The average amount of ground rent was £60 billed quarterly. The lease finished in 2078. Given that there were 52 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £39,000 and £45,000 not including fees.
Last Spring we were e-mailed by Mr T Martínez , who took over the lease of a one bedroom apartment in Peak District in October 1999. The dilemma was if we could estimate the price would be to extend the lease by a further 90 years. Identical homes in Peak District with a long lease were valued about £218,000. The average amount of ground rent was £45 invoiced yearly. The lease ended in 2089. Considering the 63 years outstanding we calculated the compensation to the freeholder for the lease extension to be within £17,100 and £19,800 plus legals.