Unfortunately that a Dorridge 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 depreciation being disguised by increases in the Dorridge property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If the number of years remaining falls under 80 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 flat owners in Dorridge will be able to extend under the legislation; however a lawyer will be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict timeframes 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.
Leasehold properties in Dorridge with in excess of one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Dorridge,the lease extension solicitors 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 Dorridge valuers.
After protracted discussions with the landlord of her garden apartment in Dorridge, Poppy initiated the lease extension process just as her lease was coming close to the crucial eighty-year deadline. The legal work was concluded in July 2015. The landlord’s fees were kept to an absolute minimum.
In 2012 we were approached by Dr Connor Rogers who, having took over the lease of a basement apartment in Dorridge in October 2001. We are asked if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparative flats in Dorridge with an extended lease were valued about £189,000. The average amount of ground rent was £55 invoiced annually. The lease lapsed in 2079. Considering the 53 years unexpired we calculated the premium to the freeholder for the lease extension to be between £28,500 and £33,000 not including costs.
Dr O Turner moved into a ground floor flat in Dorridge in March 1997. We are asked if we could shed any light on how much (approximately) premium would likely be to prolong the lease by 90 years. Similar flats in Dorridge with a long lease were worth £290,000. The average ground rent payable was £45 invoiced per annum. The lease finished on 20 November 2099. Given that there were 73 years left we estimated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of expenses.