The only way is down when it comes to Dorking lease terms. Dorking properties that have a remaining term less than than 80 years will drop in market price even faster, and the cost of extending your lease will rise.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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 conveyancing solicitors that we work with undertake Dorking 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 conveyancing solicitor we work with provide it.
Last October Leo, came critically close to the 80-year threshold with the lease on his ground floor apartment in Dorking. In buying his home 19 years previously, the lease term was of minimal interest. Luckily, he realised he would soon be paying way over the odds for a lease extension. Leo arranged for a lease extension at the eleventh hour in September. Leo and the landlord in the end settled on sum of £5,500 . If the lease had dipped to less than 80 years, the figure would have become more costly by at least £975.
In 2012 we were contacted by Dr R Martin who, having bought a purpose-built flat in Dorking in February 1995. We are asked if we could approximate the price would be to prolong the lease by an additional years. Comparable residencies in Dorking with an extended lease were worth £191,400. The average ground rent payable was £55 collected yearly. The lease expiry date was on 4 May 2080. Given that there were 54 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £34,200 and £39,600 not including legals.
In 2011 we were approached by Dr L Brooks who, having took over the lease of a garden apartment in Dorking in July 2005. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by an additional years. Similar properties in Dorking with an extended lease were worth £295,000. The mid-range amount of ground rent was £45 billed every twelve months. The lease finished in 2100. Considering the 74 years remaining we approximated the premium to the landlord for the lease extension to be within £8,600 and £9,800 not including legals.