The re-sale value of a leasehold property in Dawley and Lawley is impacted by how long the lease has left to run. If it is close to or fewer than 80 years you should envisage problems on re-sale, so it is recommended to arrange for a lease extension ahead of purchasing. It is preferable to start the lease extension process when a lease still has 82 years unexpired so that a lease extension can be addressed well before the 80 year cut off point. Statute enables Dawley and Lawley qualifying lessees to acquire a lease extension of ninety years in addition to the remaining length of the lease at a peppercorn rent (that is, rent free). The reason of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold premises in Dawley and Lawley with in excess of 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with handle Dawley and Lawley 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 lawyer we work with provide it.
Last Autumn Felix, started to get close to the 80-year threshold with the lease on his garden flat in Dawley and Lawley. Having purchased his home 18 years ago, the length of the lease was of little bearing. As luck would have it, he recognised he would imminently be paying an escalated premium for Extending the lease. Felix arranged for a lease extension at the eleventh hour in January. Felix and the freeholder via the management company subsequently agreed on sum of £5,000 . If the lease had descended to less than 80 years, the price would have escalated by at least £850.
Last month we were approach by Mr and Mrs. B François , who acquired a one bedroom apartment in Dawley and Lawley in April 2005. The dilemma was if we could approximate the compensation to the landlord would likely be to prolong the lease by ninety years. Identical properties in Dawley and Lawley with 100 year plus lease were in the region of £166,400. The mid-range ground rent payable was £60 billed per annum. The lease came to a finish on 11 June 2080. Having 54 years remaining we approximated the premium to the landlord to extend the lease to be between £32,300 and £37,400 exclusive of legals.
Mr Aarav Michel owned a garden flat in Dawley and Lawley in November 2000. The question was if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year lease extension. Comparable flats in Dawley and Lawley with 100 year plus lease were in the region of £227,800. The mid-range ground rent payable was £45 collected yearly. The lease lapsed on 10 July 2091. Having 65 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 plus expenses.