The value of Dingle leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase significantly once the unexpired lease term is less than eighty years
It is generally considered that a residential leasehold with over 100 years remaining is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service will provide you increased control over the value of your Dingle leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Following unsuccessful correspondence with the landlord of her garden apartment in Dingle, Charlotte commenced the lease extension process just as her lease was coming close to the critical eighty-year mark. The lease extension was finalised in February 2009. The landlord’s costs were kept to an absolute minimum.
Dr V Smith completed a studio flat in Dingle in January 2002. The question was if we could approximate the compensation to the landlord could be for a 90 year lease extension. Comparable flats in Dingle with 100 year plus lease were worth £200,800. The average amount of ground rent was £65 billed per annum. The lease ended in 2085. Given that there were 60 years left we calculated the compensation to the freeholder to extend the lease to be within £20,900 and £24,200 not including expenses.
Last year we were called by Dr Y Clarke , who completed a first floor flat in Dingle in January 2009. We are asked if we could estimate the compensation to the landlord would be for a ninety year lease extension. Identical residencies in Dingle with a long lease were worth £255,000. The average ground rent payable was £50 billed every twelve months. The lease expired on 1 July 2096. Taking into account 71 years left we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 plus fees.