Desborough leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Desborough tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Desborough you should check if your lease has between 70 and ninety years remaining. There are compelling reasons why a Desborough flat owner with a lease having around 80 years unexpired should take action to make sure that a lease extension is actioned without delay
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 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 Desborough 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 lawyer we work with provide it.
Jack owned a studio flat in Desborough on the market with a lease of just over 72 years unexpired. Jack informally approached his landlord a well known London-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £150 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Jack to exercise his statutory right. Jack procured expert legal guidance and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
In 2013 we were approached by Mr and Mrs. H Brooks who, having moved into a one bedroom flat in Desborough in August 2008. The question was if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year extension to my lease. Comparative residencies in Desborough with a long lease were valued around £252,800. The mid-range ground rent payable was £65 billed quarterly. The lease finished on 14 June 2091. Given that there were 65 years outstanding we calculated the compensation to the landlord to extend the lease to be within £18,100 and £20,800 not including professional charges.
In 2009 we were called by Mr and Mrs. K Cooper who, having was assigned a lease of a purpose-built flat in Desborough in August 2006. We are asked if we could estimate the premium would likely be for a ninety year extension to my lease. Comparative premises in Desborough with 100 year plus lease were worth £191,400. The average ground rent payable was £55 invoiced every twelve months. The lease lapsed on 8 May 2080. Considering the 54 years outstanding we calculated the compensation to the freeholder for the lease extension to be within £34,200 and £39,600 exclusive of legals.