Derby leases on residential properties are gradually losing value. if your lease has about 90 years left, you should start considering the need for a lease extension. If lease term is less than 80 years, you will then have to pay 50% of the property's 'marriage value' on top of the standard cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Leasehold owners in Derby will usually be legally entitled to a lease extension; however it’s a good idea to check with a lawyer to check your eligibility. In certain circumstances you may not qualify. There are prescribed timetables and formalities to follow once the process is triggered so it’s sensible to be guided by a conveyancing solicitor during the process.
Leasehold premises in Derby with in excess of 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth 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 service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Halifax | 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. |
| 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 will provide you enhanced control over the value of your Derby leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Jake, started to get close to the 80-year threshold with the lease on his one bedroom apartment in Derby. In buying his home two decades ago, the length of the lease was of little significance. As luck would have it, it dawned on him that he would soon be paying an inflated amount for a lease extension. Jake was able to extend his lease just in the nick of time last September. Jake and the landlord who owned the flat above eventually settled on a premium of £5,500 . If the lease had descended lower than 80 years, the sum would have become more exhorbitant by at least £1,000.
In 2013 we were phoned by Dr Logan Allen who, having took over the lease of a basement flat in Derby in July 1998. The dilemma was if we could shed any light on how much (roughly) price would be to prolong the lease by an additional years. Comparative flats in Derby with a long lease were in the region of £245,000. The average amount of ground rent was £45 billed annually. The lease elapsed on 9 March 2092. Considering the 68 years left we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of costs.
In 2010 we were e-mailed by Mr and Mrs. Y Taylor who, having owned a one bedroom flat in Derby in February 1995. The dilemma was if we could approximate the premium could be to extend the lease by an additional years. Comparative properties in Derby with 100 year plus lease were valued about £280,000. The mid-range ground rent payable was £55 collected per annum. The lease elapsed in 2103. Having 79 years remaining we approximated the compensation to the landlord to extend the lease to be within £13,300 and £15,400 plus fees.