When it comes to domestic leasehold premises in Dorchester, you effectively rent it for a certain period of time. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you may think about extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly notably once there are less than eighty years left. Leasehold owners in Dorchester with a lease drawing near to 81 years left should seriously think of extending it without delay. Once the lease term has under 80 years remaining, under the relevant statute the freeholder can calculate and demand a larger amount, based on a technical multiplication, known as “marriage value” which is payable.
It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
The lawyers that we work with handle Dorchester 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 conveyancer we work with provide it.
During the course of the last few months Ben, started to get close to the 80-year threshold with the lease on his ground floor flat in Dorchester. In buying his home 18 years ago, the lease term was of minimal concern. Luckily, he recognised he needed to take steps soon on a lease extension. Ben arranged for a lease extension just ahead of time in January. Ben and the landlord who owned the flat above eventually settled on the final figure of £5,000 . If the lease had descended below 80 years, the premium would have escalated by a minimum £1,050.
Mrs N Bonnet acquired a garden flat in Dorchester in May 2012. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by ninety years. Identical flats in Dorchester with an extended lease were valued about £168,800. The average ground rent payable was £60 invoiced quarterly. The lease ended in 2079. Taking into account 55 years remaining we calculated the premium to the landlord for the lease extension to be within £31,400 and £36,200 exclusive of expenses.
Last Christmas we were approach by Dr Michael Nelson , who owned a purpose-built flat in Dorchester in November 1999. The dilemma was if we could estimate the compensation to the landlord could be for a ninety year lease extension. Comparative homes in Dorchester with 100 year plus lease were valued around £235,200. The mid-range ground rent payable was £45 collected monthly. The lease elapsed on 8 April 2090. Considering the 66 years remaining we calculated the premium to the landlord to extend the lease to be within £12,400 and £14,200 not including fees.