Desborough leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. Legislation has been in place for sometime now which entitles qualifying Desborough residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Desborough you must check if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is generally considered that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers 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.
Off the back of unsuccessful correspondence with the landlord of her leasehold apartment in Desborough, Hollie commenced the lease extension process as the 80 year mark was fast nearing. The transaction was concluded in March 2011. The freeholder’s charges were negotiated to a tad over 500 pounds.
Mr and Mrs. R Sánchez moved into a one bedroom apartment in Desborough in November 1995. We are asked if we could approximate the premium could be to extend the lease by ninety years. Comparable homes in Desborough with a long lease were valued around £205,000. The mid-range ground rent payable was £50 billed annually. The lease terminated on 28 January 2104. Given that there were 79 years left we approximated the compensation to the landlord to extend the lease to be within £7,600 and £8,800 not including professional charges.
In 2011 we were approached by Mr and Mrs. U Hernández who, having completed a ground floor flat in Desborough in August 1996. We are asked if we could approximate the premium would be to prolong the lease by 90 years. Similar homes in Desborough with a long lease were valued around £270,000. The average ground rent payable was £65 collected quarterly. The lease terminated in 2093. Taking into account 68 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 plus costs.