West Derby 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 your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying West Derby residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in West Derby you must investigate if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the cost of any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold properties in West Derby with over 100 years outstanding on the lease are sometimes 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 to be gained by buying the freehold unless savings on ground rent and maintenance charges justify it.
| 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; |
| Godiva Mortgages | 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
Retaining our service will provide you enhanced control over the value of your West Derby leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Harrison was the the leasehold proprietor of a high value flat in West Derby being marketed with a lease of fraction over 72 years unexpired. Harrison informally spoke with his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 annually. Ordinarily, ground rent would not be payable on a lease extension were Harrison to invoke his statutory right. Harrison procured expert legal guidance and secured an acceptable resolution without resorting to tribunal and readily saleable.
In 2013 we were approached by Mr and Mrs. K Rodríguez who, having completed a studio flat in West Derby in April 2000. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year lease extension. Comparable residencies in West Derby with 100 year plus lease were in the region of £205,000. The average amount of ground rent was £50 invoiced per annum. The lease terminated on 8 June 2103. Considering the 78 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 plus legals.
In 2009 we were contacted by Dr O King who, having moved into a one bedroom apartment in West Derby in November 1997. The dilemma was if we could shed any light on how much (roughly) premium would be to prolong the lease by ninety years. Comparable residencies in West Derby with a long lease were in the region of £267,600. The average ground rent payable was £65 billed per annum. The lease concluded on 18 September 2092. Considering the 67 years outstanding we calculated the premium to the freeholder for the lease extension to be within £14,300 and £16,400 exclusive of legals.