The market value of Debenham leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate significantly once the unexpired lease term is less than eighty years
Leasehold properties in Debenham with more than one hundred years outstanding 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 home. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges justify 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. |
| 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with undertake Debenham 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.
Off the back of unsuccessful discussions with the landlord of her studio apartment in Debenham, Louise initiated the lease extension process just as the lease was coming close to the critical 80-year deadline. The transaction was finalised in October 2010. The landlord’s costs were negotiated to approximately four hundred GBP.
Mr and Mrs. O Walker took over the lease of a studio flat in Debenham in February 2002. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by an additional years. Similar properties in Debenham with 100 year plus lease were in the region of £280,000. The mid-range ground rent payable was £45 collected monthly. The lease expiry date was on 15 April 2095. Considering the 70 years outstanding we estimated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 not including costs.
Mr and Mrs. N Ward bought a ground floor apartment in Debenham in June 2002. The dilemma was if we could shed any light on how much (roughly) premium could be to extend the lease by 90 years. Comparative homes in Debenham with a long lease were worth £218,400. The average amount of ground rent was £60 invoiced per annum. The lease elapsed in 2084. Having 59 years remaining we calculated the premium to the freeholder for the lease extension to be between £27,600 and £31,800 exclusive of fees.