The market value of Dockland Settlement 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 escalate materialy once the remaining term is below than 80 years
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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 |
The conveyancing solicitors 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 conveyancing solicitor we work with provide it.
Two years ago Teddy, started to get close to the eighty-year threshold with the lease on his first floor apartment in Dockland Settlement. Having purchased his flat 18 years ago, the unexpired term was of little significance. Fortunately, he recognised he would imminently be paying way over the odds for Extending the lease. Teddy arranged for a lease extension at the eleventh hour in September. Teddy and the freeholder via the management company ultimately settled on the final figure of £5,000 . If the lease had dipped below 80 years, the amount would have become more exhorbitant by at least £950.
Mr and Mrs. C Howard moved into a one bedroom flat in Dockland Settlement in April 2012. We are asked if we could estimate the price could be for a 90 year lease extension. Similar properties in Dockland Settlement with an extended lease were in the region of £173,800. The mid-range ground rent payable was £60 collected annually. The lease came to a finish on 5 October 2081. Having 55 years left we approximated the compensation to the freeholder to extend the lease to be between £31,400 and £36,200 plus legals.
An example of a Lease Extension decision for a Dockland Settlement premises 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 related to 2 flats. The unexpired residue of the current lease was 72 years.