It’s an underpublicised certainty that a Dartmouth residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Dartmouth property market.Where your lease has approximately 90 years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below eighty years - otherwise a higher premium will be payable. The majority of flat owners in Dartmouth will be able to extend under the legislation; however a conveyancer should be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth approximately the equivalent as a freehold. Where an further 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 |
|---|---|
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The conveyancers that we work with undertake Dartmouth lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Last Summer Hugo, came dangerously near to the eighty-year mark with the lease on his two bedroom apartment in Dartmouth. In buying his home two decades ago, the lease term was of no bearing. Luckily, he became aware that he would soon be paying an inflated amount for Extending the lease. Hugo arranged for a lease extension just in the nick of time last May. Hugo and the freeholder subsequently agreed on the final figure of £5,500 . If he failed to meet the deadline, the price would have escalated by a minimum £900.
Last February we were approach by Mr and Mrs. U López , who was assigned a lease of a one bedroom flat in Dartmouth in January 2011. The dilemma was if we could approximate the premium would likely be for a ninety year extension to my lease. Comparable flats in Dartmouth with an extended lease were valued around £285,000. The mid-range ground rent payable was £45 collected annually. The lease terminated in 2097. Taking into account 72 years as a residual term we approximated the premium to the landlord for the lease extension to be within £12,400 and £14,200 exclusive of fees.
In 2009 we were called by Mr and Mrs. W Davis who, having owned a ground floor apartment in Dartmouth in July 1998. The dilemma was if we could estimate the compensation to the landlord could be to prolong the lease by ninety years. Similar homes in Dartmouth with a long lease were in the region of £233,200. The average amount of ground rent was £60 invoiced annually. The lease ended in 2086. Taking into account 61 years outstanding we estimated the compensation to the landlord to extend the lease to be between £22,800 and £26,400 not including professional charges.