Owning a flat usually means owning a lease of the property, which has a set term of years. your lease will normally be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Dronfield. Inevitably, the length of lease remaining reduces as time goes by. This is often overlooked and only becomes a problem when the flat or house needs to be sold or re-mortgaged. The fewer the years remaining the lower the value of the property and the more it will cost to extend the lease. Eligible long lease owners in Dronfield have the legal entitlement to extend the lease for a further 90 years in accordance with the 1993 Leasehold Reform Act. You should give careful consideration before delaying your Dronfield lease extension. Holding off the cost now likely increases the price you will ultimately have to pay to extend your lease
Leasehold properties in Dronfield with over one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 lawyers that we work with handle Dronfield 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 lawyer we work with provide it.
In the wake of eight months of unsuccessful correspondence with the landlord of her studio flat in Dronfield, Robyn commenced the lease extension process as the eighty year mark was fast advancing. The lease extension completed in April 2011. The landlord’s fees were negotiated to approximately five hundred pounds.
In 2009 we were contacted by Mr Tyler Cooper who, having was assigned a lease of a one bedroom apartment in Dronfield in August 2009. We are asked if we could approximate the price would likely be for a ninety year lease extension. Comparable flats in Dronfield with a long lease were valued around £206,200. The mid-range ground rent payable was £60 billed yearly. The lease expired on 10 September 2082. Considering the 56 years outstanding we approximated the premium to the freeholder for the lease extension to be within £31,400 and £36,200 exclusive of fees.
Last Spring we were contacted by Mr and Mrs. E Martinez , who was assigned a lease of a ground floor flat in Dronfield in May 1999. We are asked if we could estimate the price would likely be to prolong the lease by ninety years. Comparative premises in Dronfield with 100 year plus lease were worth £300,000. The average ground rent payable was £50 invoiced annually. The lease terminated in 2102. Given that there were 76 years left we approximated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of professional charges.