Unfortunately that a Derby residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Derby property prices.Where your lease has approximately 90 years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips under eighty years - otherwise a higher premium will be due. Most leasehold owners in Derby will be able to extend under the legislation; however a lawyer will be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer for the duration of the process.
Leasehold premises in Derby with over one hundred years remaining 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 premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | 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 |
Engaging our service gives you increased control over the value of your Derby leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to lengthy discussions with the landlord of her purpose-built apartment in Derby, Alexandra started the lease extension process as the eighty year threshold was quickly nearing. The lease extension was finalised in September 2011. The freeholder’s charges were kept to an absolute minimum.
In 2011 we were phoned by Mr Blake Scott who, having bought a basement flat in Derby in September 2003. The dilemma was if we could estimate the compensation to the landlord could be for a ninety year lease extension. Comparable homes in Derby with a long lease were valued about £250,000. The mid-range amount of ground rent was £50 collected per annum. The lease ended on 14 October 2095. Taking into account 69 years remaining we estimated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 not including costs.
Mrs S Lefèvre moved into a ground floor flat in Derby in September 2002. The dilemma was if we could approximate the compensation to the landlord could be to extend the lease by a further 90 years. Comparable homes in Derby with 100 year plus lease were in the region of £290,000. The average amount of ground rent was £60 billed monthly. The lease ran out on 23 May 2106. Given that there were 80 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of costs.