It’s a harsh truth that a Delabole residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Delabole 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 dips below eighty years - otherwise a higher amount will be due. Most leasehold owners in Delabole will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your lawyer throughout the process.
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The lawyers that we work with undertake Delabole 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.
In 2014 Gabriel, came precariously close to the eighty-year mark with the lease on his leasehold flat in Delabole. Having bought his property 19 years previously, the unexpired term was of no importance. Thankfully, he recognised he needed to take steps soon on a lease extension. Gabriel arranged for a lease extension at the eleventh hour in September. Gabriel and the landlord eventually agreed on sum of £5,500 . If the lease had fallen lower than 80 years, the figure would have escalated by at least £975.
In 2010 we were contacted by Dr J Bailey who, having purchased a studio flat in Delabole in March 2001. We are asked if we could approximate the compensation to the landlord would be for a 90 year lease extension. Comparable properties in Delabole with a long lease were in the region of £295,000. The mid-range ground rent payable was £45 billed per annum. The lease termination date was in 2100. Considering the 74 years unexpired we calculated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 not including professional charges.
Dr E Bell owned a garden flat in Delabole in January 2012. We are asked if we could estimate the price could be to prolong the lease by a further 90 years. Comparable properties in Delabole with a long lease were worth £243,000. The average amount of ground rent was £65 invoiced yearly. The lease lapsed on 9 January 2089. Having 63 years left we calculated the premium to the freeholder to extend the lease to be within £20,000 and £23,000 plus professional charges.