Unfortunately that a Dulverton residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Dulverton property market.Once your lease gets to 85ish years, you should start considering a lease extension. If lease term dips below eighty years, you will then be required to pay 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 additional value that a lease extension will add the property The majority of leasehold owners in Dulverton will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the process.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the property will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a landlord in Dulverton,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Dulverton valuers.
Hugo owned a studio flat in Dulverton on the market with a lease of just over fifty eight years remaining. Hugo informally approached his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £125 per annum. No ground rent would be payable on a lease extension were Hugo to exercise his statutory right. Hugo obtained expert advice and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
Last Autumn we were approach by Dr V King , who took over the lease of a studio apartment in Dulverton in March 1996. The question was if we could estimate the premium would likely be to prolong the lease by ninety years. Identical residencies in Dulverton with a long lease were in the region of £225,400. The average amount of ground rent was £45 invoiced yearly. The lease elapsed on 20 January 2090. Taking into account 64 years left we calculated the premium to the freeholder for the lease extension to be within £15,200 and £17,600 plus legals.
In 2011 we were approached by Mrs T Allen who, having purchased a ground floor apartment in Dulverton in October 2012. We are asked if we could estimate the price would likely be for a ninety year lease extension. Identical homes in Dulverton with a long lease were in the region of £270,000. The mid-range amount of ground rent was £55 billed per annum. The lease terminated on 22 June 2101. Given that there were 75 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of fees.