It’s an underpublicised certainty that a Dereham residential lease is a wasting 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 depreciation being disguised by increases in the Dereham property prices.Once your lease gets to 85ish years, you should start considering a lease extension. If the number of years remaining slips under eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Dereham will be able to extend under the legislation; however a conveyancer should be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your lawyer throughout the formalities.
Leasehold residencies in Dereham with more than 100 years remaining on the lease are sometimes 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 to be gained by buying the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service will provide you better control over the value of your Dereham leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Twenty four months ago Eli, started to get near to the eighty-year threshold with the lease on his first floor apartment in Dereham. In buying his property twenty years previously, the unexpired term was of little interest. As luck would have it, he recognised he would soon be paying way over the odds for Extending the lease. Eli arranged for a lease extension just under the wire in June. Eli and the landlord who owned the flat above subsequently settled on the final figure of £6,000 . If the lease had slipped lower than 80 years, the figure would have escalated by a minimum £950.
Mrs F Gray acquired a garden flat in Dereham in August 1996. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by 90 years. Comparative flats in Dereham with 100 year plus lease were worth £285,000. The average amount of ground rent was £55 collected monthly. The lease expiry date was on 10 April 2104. Given that there were 79 years remaining we estimated the premium to the landlord to extend the lease to be within £13,300 and £15,400 exclusive of expenses.
Last Winter we were e-mailed by Mr and Mrs. J Lewis , who took over the lease of a purpose-built flat in Dereham in January 2010. We are asked if we could estimate the compensation to the landlord would be to extend the lease by a further 90 years. Similar properties in Dereham with a long lease were worth £193,400. The mid-range amount of ground rent was £65 invoiced monthly. The lease ran out in 2084. Taking into account 59 years unexpired we calculated the compensation to the landlord to extend the lease to be between £21,900 and £25,200 plus expenses.