The value of Derby leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate significantly once the remaining term is less than eighty years
It is generally considered that a property with over 100 years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
Irrespective of whether you are a tenant or a freeholder in Derby,the lease extension solicitors that we work with will always be prepared 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.
Austin was the the leasehold proprietor of a high value flat in Derby on the market with a lease of just over sixty years outstanding. Austin on an informal basis contacted his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Austin to invoke his statutory right. Austin procured expert legal guidance and secured satisfactory resolution informally and ending up with a market value flat.
Last September we were e-mailed by Mr T Cox , who completed a recently refurbished apartment in Derby in June 2008. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to prolong the lease by an additional years. Similar homes in Derby with an extended lease were worth £260,000. The mid-range ground rent payable was £50 collected quarterly. The lease elapsed in 2098. Taking into account 72 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus costs.
Mr and Mrs. V Ali owned a one bedroom flat in Derby in August 2001. The question was if we could estimate the premium would likely be for a ninety year lease extension. Similar premises in Derby with a long lease were in the region of £261,600. The average amount of ground rent was £60 collected annually. The lease elapsed on 15 March 2078. Having 52 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £39,000 and £45,000 exclusive of fees.