It’s an underpublicised certainty that a Dunholme 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 early years due to the deflation being disguised by increases in the Dunholme property market.Once your lease nears 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under 80 years - otherwise a higher premium will be payable. The majority of leasehold owners in Dunholme will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some situations you may not qualify. 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 conveyancing solicitor from beginning to end of the process.
Leasehold properties in Dunholme with more than one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges justify 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 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date 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 freeholder in Dunholme,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Dunholme valuers.
Off the back of lengthy negotiations with the freeholder of her ground floor flat in Dunholme, Maisie started the lease extension process just as the lease was nearing the all-important eighty-year mark. The lease extension was concluded in June 2011. The landlord’s costs were restricted to slightly above 550 GBP.
In 2010 we were phoned by Ms U Wood who, having purchased a studio flat in Dunholme in July 1997. We are asked if we could shed any light on how much (roughly) premium could be to extend the lease by 90 years. Identical flats in Dunholme with 100 year plus lease were valued about £285,000. The mid-range ground rent payable was £45 billed yearly. The lease came to a finish in 2098. Taking into account 72 years remaining we estimated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 not including costs.
In 2009 we were called by Dr J Mercier who, having acquired a newly refurbished apartment in Dunholme in June 1998. The dilemma was if we could estimate the price would likely be for a ninety year extension to my lease. Comparable homes in Dunholme with a long lease were valued about £233,200. The average ground rent payable was £60 collected every twelve months. The lease concluded on 26 May 2087. Considering the 61 years outstanding we calculated the premium to the landlord to extend the lease to be within £22,800 and £26,400 plus legals.