With a long leasehold premises in Dore, you are actually purchasing a right to live in a property for a prescribed time frame. These days flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you may think about extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly particularly once there are less than eighty years remaining. Leasehold owners in Dore with a lease drawing near to 81 years left should seriously think of extending it sooner rather than later. Once a lease has under 80 years left, under the current statute the freeholder can calculate and charge a larger amount, based on a technical computation, strangely termed as “marriage value” which is due.
Leasehold properties in Dore with more than 100 years unexpired on the lease are often 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 freehold unless savings on ground rent and estate 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 |
Regardless of whether you are a tenant or a freeholder in Dore,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Dore valuers.
Two years ago Finley, started to get close to the eighty-year threshold with the lease on his one bedroom flat in Dore. Having purchased his property 19 years ago, the length of the lease was of no bearing. Thankfully, he noticed he would soon be paying an escalated premium for Extending the lease. Finley arranged for a lease extension at the eleventh hour last March. Finley and the freeholder in the end agreed on an amount of £5,500 . If he not met the deadline, the price would have gone up by a minimum £1,075.
Last October we were e-mailed by Ms Charlotte David , who bought a studio flat in Dore in April 2008. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Comparable residencies in Dore with an extended lease were worth £285,000. The mid-range amount of ground rent was £45 collected per annum. The lease finished in 2096. Having 71 years left we estimated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 not including expenses.
Last April we were contacted by Mrs Abigail Edwards , who completed a garden flat in Dore in February 2008. The question was if we could approximate the price would be to prolong the lease by a further 90 years. Comparative residencies in Dore with 100 year plus lease were valued around £225,800. The average ground rent payable was £60 invoiced quarterly. The lease terminated on 4 June 2085. Taking into account 60 years unexpired we approximated the compensation to the landlord for the lease extension to be between £23,800 and £27,400 not including costs.