It’s an underpublicised truth that a Dockland Settlement 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 depreciation being disguised by increases in the Dockland Settlement property prices.Once your lease nears 85ish years, you should start considering a lease extension. If lease term slips below eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most leasehold owners in Dockland Settlement will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your conveyancer for the duration of the process.
Leasehold residencies in Dockland Settlement with in excess of 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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 Dockland Settlement 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.
Half a year ago Kai, started to get close to the 80-year threshold with the lease on his leasehold apartment in Dockland Settlement. Having purchased his home two decades ago, the lease term was of little bearing. As luck would have it, it dawned on him that he needed to take action soon on Extending the lease. Kai arranged for a lease extension just under the wire last June. Kai and the landlord who owned the flat above in the end agreed on the final figure of £5,500 . If the lease had gone below eighty years, the price would have become more exhorbitant by a minimum £1,000.
In 2012 we were called by Mr and Mrs. K Mercier who, having moved into a one bedroom apartment in Dockland Settlement in April 1996. We are asked if we could shed any light on how much (approximately) premium would likely be to prolong the lease by ninety years. Comparable residencies in Dockland Settlement with an extended lease were valued around £225,400. The mid-range amount of ground rent was £45 billed every twelve months. The lease concluded in 2089. Given that there were 64 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £15,200 and £17,600 plus expenses.
An example of a Lease Extension decision for a Dockland Settlement property is 73 Walerand Road in August 2012. the result of the findings of the Tribunal led to a premium to be paid for the extended lease in respect of Flat 73 in the sum of £10,040. The premium applicable in respect of Flat 85 was £5,710. This case was in relation to 2 flats. The unexpired term was 72 years.