Unfortunately that a Desborough residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Desborough property market.Once your lease gets to 85ish years, you need to start considering a lease extension. If the number of years remaining dips under eighty years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Desborough will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer for the duration of the formalities.
It is generally considered that a property with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with undertake 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 conveyancer we work with provide it.
16 months ago Ibrahim, started to get near to the 80-year mark with the lease on his basement flat in Desborough. In buying his flat twenty years previously, the lease term was of little relevance. As luck would have it, it dawned on him that he needed to take action soon on Extending the lease. Ibrahim was able to extend his lease just under the wire in January. Ibrahim and the freeholder eventually agreed on the final figure of £5,500 . If he had missed the deadline, the figure would have gone up by a minimum £900.
In 2013 we were approached by Dr Matthew Jones who, having was assigned a lease of a studio flat in Desborough in January 2009. The dilemma was if we could shed any light on how much (roughly) price would be to extend the lease by an additional years. Comparable properties in Desborough with a long lease were worth £184,000. The average amount of ground rent was £55 collected yearly. The lease lapsed in 2078. Taking into account 53 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £28,500 and £33,000 not including costs.
In 2009 we were contacted by Mr and Mrs. A Hall who, having moved into a ground floor apartment in Desborough in May 2008. We are asked if we could shed any light on how much (approximately) premium would be to extend the lease by 90 years. Comparable homes in Desborough with 100 year plus lease were in the region of £290,000. The average ground rent payable was £45 collected every twelve months. The lease expired in 2098. Taking into account 73 years outstanding we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including costs.