It’s an underpublicised truth that a Dorchester residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Dorchester property prices.Once your lease gets to 85ish years, you should start thinking about a lease extension. If lease term slips below 80 years, you will end up paying 50% 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 additional value that a lease extension will add the property The majority of flat owners in Dorchester will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold premises in Dorchester with over 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Dorchester can be a difficult process. We recommend you procure guidance from a lawyer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Dorchester lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last October Ali, started to get near to the eighty-year threshold with the lease on his studio apartment in Dorchester. Having purchased his property two decades ago, the length of the lease was of minimal interest. As luck would have it, he realised he would imminently be paying way over the odds for a lease extension. Ali extended the lease just under the wire last May. Ali and the freeholder via the management company subsequently agreed on a premium of £6,000 . If he failed to meet the deadline, the amount would have escalated by at least £850.
Last Christmas we were contacted by Ms Samantha Clark , who purchased a one bedroom flat in Dorchester in May 1999. The dilemma was if we could estimate the price would be for a 90 year lease extension. Comparative properties in Dorchester with 100 year plus lease were in the region of £193,400. The average ground rent payable was £65 billed per annum. The lease termination date was in 2084. Having 59 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £21,900 and £25,200 not including legals.
In 2010 we were approached by Mr O Martínez who, having was assigned a lease of a one bedroom apartment in Dorchester in September 2001. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by a further 90 years. Identical premises in Dorchester with 100 year plus lease were worth £250,000. The average amount of ground rent was £50 billed annually. The lease lapsed in 2095. Considering the 70 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus professional charges.