It’s a harsh certainty that a Debenham residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Debenham property prices.Where your lease has approximately ninety years left, you should start thinking about 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 falls below eighty years - otherwise a higher amount will be due. Most leasehold owners in Debenham will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer throughout the formalities.
Leasehold properties in Debenham with in excess of one hundred years unexpired on the lease are often regarded as a ‘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 warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Regardless of whether you are a tenant or a landlord in Debenham,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 Debenham valuers.
Off the back of lengthy negotiations with the freeholder of her one bedroom apartment in Debenham, Kate commenced the lease extension process as the 80 year mark was rapidly coming. The lease extension was concluded in April 2015. The freeholder’s costs were negotiated to approximately 450 pounds.
Mr and Mrs. J Fournier purchased a basement apartment in Debenham in November 2007. The dilemma was if we could approximate the price would likely be to prolong the lease by 90 years. Comparative flats in Debenham with a long lease were worth £174,200. The average ground rent payable was £55 collected monthly. The lease finished on 22 September 2076. Given that there were 51 years as a residual term we calculated the premium to the landlord to extend the lease to be between £31,400 and £36,200 exclusive of expenses.
Last Spring we were approach by Mr and Mrs. R Díaz , who completed a ground floor flat in Debenham in June 2000. We are asked if we could estimate the compensation to the landlord would be to extend the lease by a further 90 years. Similar residencies in Debenham with 100 year plus lease were worth £285,000. The mid-range amount of ground rent was £45 billed per annum. The lease came to a finish in 2096. Considering the 71 years outstanding we estimated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 plus legals.