Dawlish residential property held on a long lease is a depreciating asset because a leaseholder only owns the property for a period of years.
Leasehold premises in Dawlish with in excess of 100 years left 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 upside in buying the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| 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. |
| 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 |
The conveyancers that we work with procure Dawlish 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.
Last October Omar, came dangerously near to the 80-year mark with the lease on his purpose- built apartment in Dawlish. Having bought his property 19 years ago, the length of the lease was of minimal importance. Fortunately, he realised he would soon be paying an escalated premium for a lease extension. Omar arranged for a lease extension just ahead of time in July. Omar and the freeholder in the end agreed on the final figure of £6,000 . If the lease had dropped lower than eighty years, the premium would have gone up by a minimum £950.
Mr and Mrs. M Gunderson bought a recently refurbished apartment in Dawlish in April 2005. The question was if we could estimate the compensation to the landlord would be to extend the lease by a further 90 years. Identical flats in Dawlish with a long lease were in the region of £171,800. The average amount of ground rent was £55 collected annually. The lease expired in 2076. Considering the 50 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £32,300 and £37,400 not including fees.
Mr and Mrs. K Nguyen owned a studio apartment in Dawlish in February 1997. We are asked if we could shed any light on how much (approximately) premium would likely be for a 90 year lease extension. Identical residencies in Dawlish with a long lease were worth £280,000. The average ground rent payable was £45 invoiced every twelve months. The lease elapsed in 2096. Taking into account 70 years remaining we approximated the premium to the landlord to extend the lease to be between £12,400 and £14,200 plus professional charges.