Dagenham leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Dagenham residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Dagenham you would be well advised to see if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold premises in Dagenham with more than 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges warrant it.
Lender | Requirement |
---|---|
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. |
Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
Leeds Building Society | 85 years remaining from the start of the mortgage. |
TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you enhanced control over the value of your Dagenham leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Jude, started to get near to the eighty-year threshold with the lease on his studio flat in Dagenham. Having bought his home two decades ago, the lease term was of no importance. Luckily, he realised he needed to take steps soon on a lease extension. Jude was able to extend his lease at the eleventh hour in June. Jude and the freeholder eventually agreed on the final figure of £5,500 . If the lease had fallen to less than eighty years, the amount would have increased by a minimum £1,100.
Last Summer we were called by Mr Y Carter , who bought a first floor apartment in Dagenham in October 1998. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Comparable premises in Dagenham with 100 year plus lease were valued around £216,000. The average ground rent payable was £60 billed quarterly. The lease ran out in 2082. Taking into account 58 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £28,500 and £33,000 plus fees.
An example of a Lease Extension decision for a Dagenham residence 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 term as at the valuation date was 61.36 years.