For those whose Dronfield property is held on a long lease, the message is clear – if no remedial action is taken, your property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to extend the lease.
It is conventional wisdom that a property with over 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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 |
| 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 conveyancers 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 conveyancer we work with provide it.
During the course of the last few months Aaron, started to get close to the eighty-year threshold with the lease on his first floor flat in Dronfield. In buying his property 18 years ago, the length of the lease was of little concern. Luckily, he realised he would soon be paying way over the odds for Extending the lease. Aaron arranged for a lease extension just under the wire last April. Aaron and the freeholder via the management company ultimately settled on a premium of £5,500 . If he not met the deadline, the premium would have gone up by at least £1,050.
Mr O Johnson moved into a first floor flat in Dronfield in November 1997. The dilemma was if we could estimate the price would be for a ninety year extension to my lease. Identical properties in Dronfield with a long lease were in the region of £233,200. The average ground rent payable was £60 billed per annum. The lease lapsed in 2087. Taking into account 61 years outstanding we approximated the premium to the landlord for the lease extension to be between £22,800 and £26,400 not including fees.
Last July we were phoned by Mr and Mrs. O Wood , who was assigned a lease of a ground floor apartment in Dronfield in March 2011. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by an additional years. Identical premises in Dronfield with 100 year plus lease were valued about £171,800. The average ground rent payable was £55 billed yearly. The lease elapsed in 2076. Having 50 years as a residual term we estimated the premium to the landlord to extend the lease to be between £33,300 and £38,400 plus costs.