The re-sale value of a leasehold property in Dorchester depends on how long the lease has remaining. If it is near to or fewer than 80 years you should envisage difficulties on re-sale, so it is recommended to arrange for a lease extension ahead of buying. It is ideal to start the lease extension process when a lease still has 82 years unexpired so that all matters can be finalised ahead of the 80 year cut off point. Statute enables Dorchester qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus a further term of 90 years. The intention of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the property will be worth the same as a freehold for many years ahead.
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Using our service will provide you better control over the value of your Dorchester leasehold, as your property will be more valuable and saleable in relation to the 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.
Half a year ago Mason, started to get near to the 80-year mark with the lease on his two bedroom apartment in Dorchester. Having purchased his home twenty years ago, the lease term was of little interest. by good luck, he became aware that he would soon be paying an inflated amount for a lease extension. Mason arranged for a lease extension at the eleventh hour in January. Mason and the freeholder via the managing agents eventually settled on the final figure of £5,000 . If the lease had dipped below eighty years, the amount would have gone up by a minimum £1,000.
Mr and Mrs. D Morris moved into a studio apartment in Dorchester in May 1999. The question was if we could estimate the price would likely be to extend the lease by 90 years. Similar properties in Dorchester with 100 year plus lease were in the region of £280,000. The mid-range amount of ground rent was £55 collected quarterly. The lease concluded on 3 March 2103. Given that there were 78 years outstanding we estimated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 not including legals.
Mr and Mrs. A Smith was assigned a lease of a purpose-built apartment in Dorchester in June 2003. We are asked if we could estimate the premium could be for a 90 year extension to my lease. Similar homes in Dorchester with an extended lease were in the region of £186,000. The mid-range ground rent payable was £65 billed yearly. The lease lapsed on 5 May 2083. Given that there were 58 years left we calculated the compensation to the freeholder to extend the lease to be between £24,700 and £28,600 exclusive of professional charges.