For anyone whose Dulwich property is held on a long lease, our message is clear – if no remedial action is taken, the property will eventually revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more it will cost to obtain a lease extension.
Leasehold properties in Dulwich with in excess of one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges merit it.
| 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. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Engaging our service gives you increased control over the value of your Dulwich leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Following protracted correspondence with the landlord of her one bedroom flat in Dulwich, Kelsey initiated the lease extension process as the eighty year threshold was quickly approaching. The legal work completed in April 2015. The landlord’s charges were restricted to slightly above 450 pounds.
Last month we were approach by Mrs E Martínez , who owned a garden apartment in Dulwich in July 1997. The question was if we could estimate the premium would likely be for a ninety year lease extension. Comparative properties in Dulwich with a long lease were valued about £181,600. The mid-range amount of ground rent was £55 billed annually. The lease ended in 2078. Considering the 52 years as a residual term we calculated the premium to the freeholder to extend the lease to be within £30,400 and £35,200 not including expenses.
An example of a Lease Extension case for a Dulwich flat is 60 Taymount Grange Taymount Rise in June 2012. The Tribunal determined the premium at £13,346 for a lease extension of a further 90 years This case was in relation to 1 flat. The unexpired lease term was 64 years.