Category — Duchy Leasehold Property

Duchy Leasehold Properties

DUCHY LEASEHOLD GUIDANCE NOTES

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1. These leases are with the Duchy of Cornwall.

2. It is not possible to have a mortgage on a Duchy Leasehold property because the leases are too short.

3. The majority of Duchy of Cornwall leases have been structured in such a way that upon the expiry of the initial fixed term (the contractual lease), the agreement will continue by virtue of the protection afforded by the Housing Act 1988 or the Rent Act 1977. Typically, the terms of the contractual lease will continue as a protected annual tenancy with potentially perpetual security.

4. At the issue of a new lease there will be a sum payable to the Duchy of Cornwall which will be equivalent to 50% of the expected up lift in value of the property with the new lease. As a rough guide, it is likely that this uplift would equate to approximately 10% of the full leasehold value of the property with the new 20 year lease. EXAMPLE: A zero year lease may be worth £250,000 and a new 20 year lease may increase the value to £275,000. Therefore the new lease would cost £12,500.

5. In addition to the premium asked which is payable to the existing tenant, annual rent must also be paid to the Duchy and this is subject to review periodically.

5. The leases are all full repairing.