The re-sale value of a leasehold property in Dover is impacted by how many years the lease has remaining. If it is close to or fewer than eighty years you should foresee problems on re-sale, so it is advisable to arrange for the lease to be extended before buying. Ideally one should start the lease extension process when a lease still has 82 years unexpired so that all matters can be concluded in advance of the eighty year cut off point. Leasehold Reform legislation entitles Dover qualifying lessees to obtain a lease extension of 90 years on top of the remaining length of the lease at a peppercorn rent (that is, rent free). The intention of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Dover with more than one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges merit 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. |
| 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; |
| 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. |
| 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 |
| 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. |
The conveyancing solicitors that we work with procure Dover 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 conveyancer we work with provide it.
Trailing unsuccessful correspondence with the landlord of her first floor apartment in Dover, Lucy initiated the lease extension process as the eighty year threshold was fast nearing. The lease extension was finalised in October 2015. The landlord’s fees were negotiated to slightly above 500 GBP.
In 2013 we were e-mailed by Mr B Girard who, having bought a ground floor apartment in Dover in February 2011. The question was if we could approximate the compensation to the landlord could be to extend the lease by a further 90 years. Comparative properties in Dover with a long lease were valued around £275,000. The mid-range amount of ground rent was £55 collected quarterly. The lease terminated on 15 February 2101. Taking into account 76 years outstanding we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of fees.
Ms D Rose acquired a first floor apartment in Dover in February 2008. We are asked if we could shed any light on how much (roughly) premium would be for a 90 year extension to my lease. Comparable flats in Dover with 100 year plus lease were valued around £176,200. The average amount of ground rent was £65 collected per annum. The lease end date was in 2081. Taking into account 56 years left we calculated the compensation to the freeholder to extend the lease to be within £29,500 and £34,000 plus costs.