The nearer a domestic lease in Derby gets to zero years unexpired, the more it reduces the value of the property. Where the residual term has, in excess of 125 years to run then this decrease may be of little impact nevertheless there will become a point in time when a lease has less than eighty years unexpired as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the main rational as to why you should extend the lease without delay. Many flat owners in Derby will meet the qualifying criteria; that being said a conveyancing solicitor can advise whether you qualify for a lease extension. In limited situations you may not qualify, the most common reason being that you have owned the property for under two years.
Leasehold residencies in Derby with in excess of 100 years remaining 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 home. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 conveyancers that we work with procure Derby 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.
John owned a high value apartment in Derby being marketed with a lease of a few days over 59 years left. John on an informal basis spoke with his landlord being a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent initially set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were John to exercise his statutory right. John procured expert legal guidance and was able to make an informed judgement and handle with the matter and readily saleable.
In 2012 we were called by Ms W Ward who, having acquired a ground floor flat in Derby in April 2001. We are asked if we could approximate the premium would likely be to extend the lease by 90 years. Similar homes in Derby with a long lease were valued about £200,800. The mid-range ground rent payable was £65 billed yearly. The lease ran out in 2085. Considering the 60 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £20,900 and £24,200 not including expenses.
In 2013 we were e-mailed by Mr and Mrs. W Wilson who, having acquired a garden flat in Derby in November 2006. We are asked if we could shed any light on how much (approximately) premium could be to prolong the lease by an additional years. Identical residencies in Derby with an extended lease were worth £260,000. The mid-range amount of ground rent was £50 invoiced annually. The lease expired on 13 February 2096. Taking into account 71 years as a residual term we calculated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus costs.