Unfortunately that a Dorking residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Dorking property prices.Once your lease gets to 85ish years, you need to start considering a lease extension. If the number of years remaining drops under eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Dorking will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
It is generally considered that a property with over 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the residence will be equivalent in value to a freehold for many years in the future.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Dorking,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Dorking valuers.
Last Summer Noah, started to get near to the eighty-year threshold with the lease on his basement apartment in Dorking. Having purchased his property two decades ago, the unexpired term was of no concern. Luckily, he became aware that he needed to take steps soon on Extending the lease. Noah arranged for a lease extension just under the wire in May. Noah and the freeholder via the managing agents in the end agreed on an amount of £5,000 . If he not met the deadline, the sum would have increased by at least £900.
Last year we were e-mailed by Dr Rachel Campbell , who took over the lease of a one bedroom apartment in Dorking in March 1997. We are asked if we could shed any light on how much (approximately) premium could be to prolong the lease by an additional years. Identical premises in Dorking with 100 year plus lease were worth £250,400. The mid-range ground rent payable was £65 collected annually. The lease concluded on 16 February 2089. Given that there were 64 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £19,000 and £22,000 not including expenses.
Last Spring we were phoned by Mr Jasper Clarke , who purchased a garden flat in Dorking in March 2008. The question was if we could estimate the premium would likely be to prolong the lease by ninety years. Comparative homes in Dorking with 100 year plus lease were valued around £184,000. The mid-range amount of ground rent was £55 collected monthly. The lease ended on 3 January 2078. Considering the 53 years remaining we approximated the premium to the landlord to extend the lease to be between £28,500 and £33,000 plus expenses.