Debenham leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Debenham residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Debenham you should check if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Debenham with in excess of one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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. |
| Yorkshire Building Society | 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. |
Lease extensions in Debenham can be a difficult process. We recommend you procure professional help from a lawyer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Debenham lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Following protracted correspondence with the landlord of her first floor flat in Debenham, Millie initiated the lease extension process just as her lease was coming close to the all-important 80-year deadline. The legal work was concluded in May 2012. The freeholder’s costs were negotiated to slightly above 650 GBP.
Last Autumn we were phoned by Dr P Edwards , who completed a one bedroom apartment in Debenham in May 2012. We are asked if we could shed any light on how much (roughly) price would likely be for a ninety year extension to my lease. Comparable flats in Debenham with 100 year plus lease were valued around £295,000. The average ground rent payable was £50 collected annually. The lease expired in 2100. Considering the 75 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of costs.
In 2010 we were phoned by Dr Y Leroy who, having owned a purpose-built apartment in Debenham in June 1996. We are asked if we could approximate the price would be for a 90 year lease extension. Identical homes in Debenham with 100 year plus lease were in the region of £250,400. The average amount of ground rent was £65 invoiced quarterly. The lease expiry date was in 2089. Having 64 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £19,000 and £22,000 not including legals.