The market value of Dalston leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can escalate substantially once the remaining term is below than 80 years
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
Lender | Requirement |
---|---|
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. |
Leeds Building Society | 85 years remaining from the start 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 |
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. |
Irrespective of whether you are a tenant or a landlord in Dalston,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Dalston valuers.
Last year Owen, started to get close to the 80-year threshold with the lease on his one bedroom apartment in Dalston. In buying his home twenty years previously, the lease term was of no concern. Thankfully, he became aware that he needed to take steps soon on a lease extension. Owen was able to extend his lease just in the nick of time last March. Owen and the landlord ultimately settled on a premium of £5,500 . If the lease had dipped below eighty years, the premium would have become more costly by a minimum £1,025.
Last Spring we were contacted by Mr and Mrs. G Simon , who completed a studio flat in Dalston in June 2008. We are asked if we could estimate the premium could be to extend the lease by 90 years. Comparative homes in Dalston with a long lease were worth £205,000. The mid-range amount of ground rent was £50 collected annually. The lease lapsed on 11 May 2102. Considering the 78 years unexpired we estimated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus costs.
An example of a Freehold Enfranchisement matter before the tribunal for a Dalston property is 150 Amhurst Road in December 2013. The tribunal concluded that the premium to be paid by the applicant for the enfranchisement of the subject property was £43,500. This case related to 4 flats. The unexpired residue of the current lease was 90 (or thereabouts).