The market value of a leasehold property in Derby is impacted by how long the lease has remaining. If it is close to or less than eighty years you should envisage difficulties on re-sale, so it is recommended to arrange for the lease to be extended prior to buying. It is ideal to start the process of extending the lease is when a lease still has 82 years remaining so that all matters can be concluded in advance of the eighty year mark. Leasehold Reform legislation entitles Derby qualifying lessees to acquire a new lease which will be for the current unexpired lease term plus an additional term of 90 years. The intention of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold residencies in Derby with in excess of one hundred years left 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 property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges justify it.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 Derby 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 conveyancer we work with provide it.
Leon was the the leasehold proprietor of a high value flat in Derby on the market with a lease of a little over fifty eight years unexpired. Leon informally spoke with his freeholder a well known London-based freehold company for a lease extension. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Leon to exercise his statutory right. Leon procured expert advice and secured satisfactory deal informally and readily saleable.
In 2011 we were phoned by Mr and Mrs. V Howard who, having acquired a ground floor flat in Derby in May 2007. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by a further 90 years. Identical homes in Derby with 100 year plus lease were valued around £198,400. The average ground rent payable was £65 collected per annum. The lease expired in 2084. Taking into account 59 years left we approximated the premium to the freeholder for the lease extension to be within £21,900 and £25,200 plus legals.
Last Summer we were approach by Dr N Bernard , who bought a basement apartment in Derby in July 1999. We are asked if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Similar residencies in Derby with 100 year plus lease were in the region of £255,000. The mid-range ground rent payable was £50 invoiced annually. The lease lapsed on 2 September 2095. Having 70 years remaining we approximated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 plus fees.