There is no doubt about it a leasehold flat or house in Isle of Dogs is a wasting asset as a result of the shortening lease. If the residual term has, over 100 years to run then this decrease may be fractional that being said there will become a point in time when a lease has less than 80 years unexpired as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main rational as to why you should consider extending without delay. Many flat owners in Isle of Dogs will meet the qualifying criteria; nevertheless a conveyancing solicitor can advise whether you qualify for a lease extension. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
It is generally considered that a property with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Using our service will provide you enhanced control over the value of your Isle of Dogs leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year Stanley, started to get near to the eighty-year threshold with the lease on his garden flat in Isle of Dogs. Having purchased his flat 19 years previously, the lease term was of minimal importance. Fortunately, he noticed he would soon be paying an inflated amount for a lease extension. Stanley was able to extend his lease at the eleventh hour in September. Stanley and the landlord in the end settled on the final figure of £5,000 . If he not met the deadline, the amount would have gone up by at least £975.
Mr and Mrs. D Moreau purchased a studio apartment in Isle of Dogs in November 2012. We are asked if we could approximate the price would be to prolong the lease by 90 years. Identical premises in Isle of Dogs with a long lease were worth £295,000. The average ground rent payable was £45 billed yearly. The lease lapsed in 2100. Considering the 75 years outstanding we estimated the premium to the landlord for the lease extension to be between £8,600 and £9,800 plus fees.
An example of a Freehold Enfranchisement case for a Isle of Dogs property is 12, 14 & 16 Hull Close in May 2010. the Tribunal determined that the premium payable for the acquisition of the freehold to the subject premises was the sum of £18,300 This case was in relation to 3 flats. The number of years remaining on the existing lease(s) was 101.61 years.