Unfortunately that a Dawlish residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Dawlish property prices.Once your lease nears 85ish years, you should start considering a lease extension. If the number of years remaining falls under 80 years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most leasehold owners in Dawlish will be able to extend under the legislation; however a conveyancer will be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancer for the duration of the process.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| 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; |
| 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. |
| 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. |
Retaining our service gives you better control over the value of your Dawlish leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Twenty four months ago John, started to get near to the 80-year mark with the lease on his first floor flat in Dawlish. In buying his home two decades ago, the unexpired term was of minimal importance. Thankfully, it dawned on him that he would imminently be paying an escalated premium for Extending the lease. John extended the lease just in the nick of time in January. John and the freeholder eventually agreed on an amount of £5,000 . If he failed to meet the deadline, the sum would have become more exhorbitant by at least £1,100.
In 2012 we were approached by Dr Evan Peterson who, having bought a purpose-built flat in Dawlish in February 2012. The dilemma was if we could estimate the premium could be to extend the lease by 90 years. Comparative residencies in Dawlish with 100 year plus lease were valued around £285,000. The mid-range ground rent payable was £45 collected monthly. The lease elapsed on 2 February 2095. Considering the 71 years remaining we approximated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 exclusive of legals.
In 2011 we were called by Mrs Natalie Girard who, having took over the lease of a ground floor apartment in Dawlish in July 2007. We are asked if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Identical properties in Dawlish with 100 year plus lease were valued about £225,800. The mid-range ground rent payable was £60 collected every twelve months. The lease elapsed in 2084. Having 60 years left we calculated the compensation to the freeholder for the lease extension to be within £23,800 and £27,400 exclusive of costs.