Debenham leases on residential properties are gradually losing value. if your lease has in the region of ninety years remaining, you should start thinking about a lease extension. Eighty years is a significant number: when the unexpired term of a lease falls below this level then you begin incurring an additional element called marriage value. Leasehold owners in Debenham will mostly be legally entitled to a lease extension; however a solicitor should be able check your eligibility. In some circumstances you may not be entitled. There are also strict timetables and formalities to follow once the process is triggered so it’s wise to be guided by a conveyancer during the process.
Leasehold premises in Debenham with more than 100 years outstanding on the lease are sometimes 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 purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with handle 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.
Subsequent to unsuccessful negotiations with the freeholder of her purpose-built apartment in Debenham, Hollie initiated the lease extension process just as her lease was approaching the all-important 80-year mark. The legal work was finalised in August 2005. The freeholder’s costs were restricted to under 550 pounds.
Last Spring we were contacted by Mr S André , who purchased a purpose-built flat in Debenham in February 2010. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by ninety years. Similar premises in Debenham with an extended lease were valued around £210,000. The mid-range amount of ground rent was £50 collected monthly. The lease expiry date was on 16 September 2106. Having 80 years left we estimated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of professional charges.
Last Spring we were phoned by Mrs Katherine Morel , who owned a recently refurbished apartment in Debenham in August 2008. We are asked if we could approximate the price would likely be for a ninety year extension to my lease. Comparable flats in Debenham with an extended lease were in the region of £275,000. The mid-range ground rent payable was £45 collected per annum. The lease ended in 2095. Considering the 69 years outstanding we approximated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 not including fees.