It’s a harsh certainty that a Dorking residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Dorking property prices.Where your lease has approximately 90 years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below eighty years - otherwise a higher premium will be payable. Most flat owners in Dorking will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold residencies in Dorking with in excess of one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance 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. |
| Chelsea 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you enhanced control over the value of your Dorking leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Aarav, started to get near to the 80-year mark with the lease on his garden apartment in Dorking. In buying his home two decades ago, the lease term was of minimal importance. As luck would have it, he became aware that he would imminently be paying way over the odds for a lease extension. Aarav arranged for a lease extension just under the wire last May. Aarav and the freeholder via the management company eventually agreed on a premium of £5,500 . If the lease had slid lower than 80 years, the amount would have gone up by at least £1,050.
Ms M García completed a ground floor apartment in Dorking in April 1995. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by ninety years. Identical flats in Dorking with a long lease were in the region of £300,000. The mid-range amount of ground rent was £50 collected annually. The lease concluded on 13 November 2101. Having 76 years outstanding we calculated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 not including expenses.
Last Summer we were called by Mr Jamie López , who moved into a one bedroom flat in Dorking in July 2006. We are asked if we could shed any light on how much (approximately) premium could be for a 90 year lease extension. Comparative premises in Dorking with an extended lease were valued about £252,800. The average amount of ground rent was £65 invoiced quarterly. The lease ran out in 2090. Taking into account 65 years remaining we estimated the compensation to the landlord for the lease extension to be within £17,100 and £19,800 not including professional charges.