With a residential leasehold property in Derby, you are in fact renting it for a certain period of time. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly especially when there are less than 80 years remaining. Leasehold owners in Derby with a lease nearing 81 years unexpired should seriously think of extending it without delay. Once a lease has below 80 years remaining, under the current legislation the freeholder is entitled to calculate and demand a larger amount, assessed on a technical computation, known as “marriage value” which is due.
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the residence will be worth the same as a freehold for many years ahead.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Birmingham Midshires | 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. |
Irrespective of whether you are a tenant or a freeholder in Derby,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Derby valuers.
Last year Zachary, started to get near to the 80-year threshold with the lease on his one bedroom flat in Derby. In buying his property two decades ago, the unexpired term was of no interest. by good luck, he recognised he needed to take action soon on Extending the lease. Zachary extended the lease just in the nick of time last July. Zachary and the landlord who owned the flat above subsequently agreed on a premium of £6,000 . If he not met the deadline, the price would have become more exhorbitant by a minimum £900.
In 2013 we were approached by Mr and Mrs. D Simon who, having was assigned a lease of a one bedroom apartment in Derby in February 2004. The question was if we could shed any light on how much (approximately) price could be for a ninety year extension to my lease. Similar flats in Derby with an extended lease were in the region of £208,200. The average ground rent payable was £65 billed per annum. The lease elapsed in 2087. Having 61 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £19,000 and £22,000 not including professional charges.
In 2014 we were approached by Dr I Turner who, having owned a ground floor flat in Derby in November 2009. The dilemma was if we could approximate the premium would likely be for a ninety year extension to my lease. Identical flats in Derby with a long lease were in the region of £260,000. The mid-range ground rent payable was £50 collected monthly. The lease concluded in 2098. Given that there were 72 years left we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of expenses.