The closer a residential lease in Dagenham gets to zero years unexpired, the more it reduces the value of the property. Where the lease has, in excess of 100 years remaining then this decrease may be of little impact however there will become a stage when a lease has fewer than eighty years remaining as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the main rational as to why you should extend the lease sooner as opposed to later. Most flat owners in Dagenham will qualify for this right; however a conveyancing solicitor can advise whether you are eligible for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
Leasehold residencies in Dagenham with more than 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges justify 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service gives you enhanced control over the value of your Dagenham 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.
Two years ago Muhammad, came critically close to the 80-year mark with the lease on his two bedroom flat in Dagenham. In buying his property 18 years ago, the length of the lease was of no importance. As luck would have it, it dawned on him that he would imminently be paying an escalated premium for Extending the lease. Muhammad arranged for a lease extension just ahead of time last July. Muhammad and the landlord who owned the flat above in the end settled on a premium of £5,000 . If he not met the deadline, the sum would have gone up by at least £1,075.
In 2012 we were called by Dr E Moreau who, having bought a studio flat in Dagenham in June 2009. The dilemma was if we could shed any light on how much (approximately) premium would likely be to prolong the lease by 90 years. Comparative homes in Dagenham with a long lease were in the region of £191,400. The average amount of ground rent was £55 collected every twelve months. The lease ran out on 13 April 2080. Given that there were 54 years remaining we estimated the premium to the landlord to extend the lease to be between £34,200 and £39,600 not including professional charges.
An example of a Lease Extension case for a Dagenham property is 49 Aldborough Road South in July 2012. The Tribunal decided that the premium payable for the grant of the new lease was £13,925 This case related to 1 flat. The unexpired lease term was 61.36 years.