When it comes to long leasehold premises in Dore, you are actually purchasing an entitlement to live in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider a lease extension sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive especially when there are less than 80 years remaining. Anyone in Dore with a lease drawing near to 81 years left should seriously think of extending it sooner as opposed to later. When the lease term has under eighty years left, under the current Act the freeholder can calculate and demand a larger premium, based on a technical multiplication, known as “marriage value” which is payable.
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 conveyancers that we work with undertake Dore 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.
Teddy owned a high value apartment in Dore being sold with a lease of a few days over fifty eight years unexpired. Teddy on an informal basis approached his freeholder being a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £100 yearly. No ground rent would be due on a lease extension were Teddy to invoke his statutory right. Teddy procured expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Last Winter we were phoned by Ms Emily Adams , who moved into a studio apartment in Dore in October 1999. We are asked if we could shed any light on how much (roughly) price would be to prolong the lease by an additional years. Similar flats in Dore with 100 year plus lease were in the region of £223,400. The mid-range amount of ground rent was £60 collected yearly. The lease came to a finish in 2084. Taking into account 59 years left we estimated the compensation to the landlord for the lease extension to be between £27,600 and £31,800 plus costs.
Mr and Mrs. L Howard acquired a first floor apartment in Dore in April 2010. We are asked if we could shed any light on how much (approximately) premium would likely be to extend the lease by 90 years. Identical properties in Dore with an extended lease were in the region of £205,000. The average amount of ground rent was £50 billed per annum. The lease finished on 1 February 2104. Given that there were 79 years outstanding we estimated the premium to the landlord to extend the lease to be within £8,600 and £9,800 not including costs.