Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will usually be granted for a set period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Dartmouth. Clearly, the term of lease remaining reduces over time. This is often overlooked and only becomes a problem when the residence has to be sold or refinanced. The shorter the lease the less it is worth and the more expensive it will be to obtain a lease extension. Eligible leaseholders in Dartmouth have the right to extend the lease for a further ninety years in accordance with the 1993 Leasehold Reform Act. Please give careful attention before delaying your Dartmouth lease extension. Holding off the cost now likely increases the price you will ultimately incur for a lease extension
It is conventional wisdom 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 residence will be equivalent in value to a freehold for decades to come.
| 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. |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you enhanced control over the value of your Dartmouth leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Felix was the the leasehold proprietor of a studio apartment in Dartmouth being marketed with a lease of fraction over fifty eight years outstanding. Felix informally contacted his landlord a well known London-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Felix to exercise his statutory right. Felix procured expert legal guidance and was able to make a more informed decision and deal with the matter and sell the property.
Mr and Mrs. U Johnson owned a ground floor flat in Dartmouth in April 2012. We are asked if we could shed any light on how much (approximately) premium would be to extend the lease by a further 90 years. Comparable flats in Dartmouth with a long lease were in the region of £280,000. The mid-range ground rent payable was £45 collected yearly. The lease finished on 1 February 2096. Considering the 70 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 not including fees.
Last month we were approach by Dr U López , who was assigned a lease of a one bedroom flat in Dartmouth in May 2005. The question was if we could estimate the premium would likely be for a ninety year lease extension. Comparable properties in Dartmouth with an extended lease were in the region of £223,400. The mid-range amount of ground rent was £60 billed monthly. The lease came to a finish on 4 June 2085. Having 59 years left we approximated the premium to the landlord for the lease extension to be within £27,600 and £31,800 not including fees.