For those whose Dockland Settlement property is held on a long lease, the message is clear – if nothing is done, your property will ultimately revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more expensive it will be to obtain a lease extension.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the residence will be equivalent in value to 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; |
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service gives you increased control over the value of your Dockland Settlement 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.
Subsequent to lengthy correspondence with the landlord of her first floor flat in Dockland Settlement, Lauren initiated the lease extension process just as the lease was coming close to the crucial eighty-year threshold. The legal work was concluded in March 2005. The landlord’s costs were kept to an absolute minimum.
In 2012 we were e-mailed by Mr and Mrs. W Patel who, having purchased a recently refurbished apartment in Dockland Settlement in March 1997. We are asked if we could estimate the premium could be for a ninety year extension to my lease. Similar residencies in Dockland Settlement with 100 year plus lease were valued around £183,600. The mid-range ground rent payable was £65 billed quarterly. The lease finished on 3 February 2082. Considering the 57 years unexpired we calculated the premium to the freeholder to extend the lease to be within £28,500 and £33,000 exclusive of expenses.
An example of a Lease Extension matter before the tribunal for a Dockland Settlement residence 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 number of years remaining on the existing lease(s) was 72 years.