Derby leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Derby residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Derby you really ought to see if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle 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 conveyancing solicitor we work with provide it.
Last year Ryan, started to get near to the 80-year mark with the lease on his basement flat in Derby. Having bought his home two decades ago, the length of the lease was of little importance. Luckily, it dawned on him that he needed to take steps soon on Extending the lease. Ryan arranged for a lease extension just under the wire last March. Ryan and the landlord subsequently agreed on the final figure of £5,000 . If the lease had fallen to less than eighty years, the premium would have become more exhorbitant by a minimum £900.
Mrs Gemma Clarke purchased a garden apartment in Derby in July 2007. The dilemma was if we could estimate the premium would likely be to prolong the lease by an additional years. Similar properties in Derby with an extended lease were worth £173,800. The average amount of ground rent was £65 collected every twelve months. The lease ended in 2080. Having 55 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £31,400 and £36,200 plus legals.
Last Spring we were contacted by Mr Kai Clark , who owned a newly refurbished apartment in Derby in May 2012. We are asked if we could approximate the price would be to prolong the lease by 90 years. Comparable premises in Derby with 100 year plus lease were in the region of £235,200. The mid-range ground rent payable was £45 billed monthly. The lease end date was on 9 July 2091. Having 66 years remaining we calculated the premium to the landlord for the lease extension to be between £12,400 and £14,200 plus fees.