The market value of a leasehold property in Dartford is impacted by how long the lease has remaining. If it is close to or fewer than 80 years you should anticipate problems on re-sale, so it is advisable to arrange for a lease extension ahead of buying. It is preferable to start the process of extending the lease is when a lease still has 82 years to run so that formalities can be finalised ahead of the 80 year cut off point. Statute enables Dartford qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus an additional term of ninety years. The intention of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally accepted that a property with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| 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; |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Engaging our service gives you enhanced control over the value of your Dartford leasehold, as your property will be more valuable and marketable in relation to the 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.
Trailing lengthy negotiations with the landlord of her purpose-built flat in Dartford, Rosie initiated the lease extension process just as the lease was nearing the crucial eighty-year mark. The transaction completed in September 2005. The freeholder’s costs were restricted to below 450 GBP.
In 2009 we were contacted by Dr Sarah Edwards who, having purchased a recently refurbished apartment in Dartford in May 2010. We are asked if we could shed any light on how much (approximately) premium could be to extend the lease by a further 90 years. Similar homes in Dartford with 100 year plus lease were in the region of £260,200. The average ground rent payable was £65 billed monthly. The lease concluded on 15 June 2091. Considering the 66 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £15,200 and £17,600 exclusive of professional charges.
An example of a Lease Extension decision for a Dartford flat is Various @ Colombus Square in January 2012. the Tribunal calculated the premiums to be paid for new leases for each of the flats in Mariners Walk to be £3822 and the premium to be paid for the new lease of 2 Knights Court to be £4439. This case related to 13 flats. The unexpired term as at the valuation date was 76 years.