Dunmow leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Dunmow residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Dunmow you would be well advised to check if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the cost of any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Dunmow with in excess of one hundred years remaining 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 to be gained by purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Engaging our service will provide you better control over the value of your Dunmow leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Aaron owned a conversion apartment in Dunmow being sold with a lease of a little over 59 years unexpired. Aaron on an informal basis contacted his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Aaron to exercise his statutory right. Aaron obtained expert legal guidance and was able to make an informed decision and handle with the matter and sell the flat.
Dr M Thomas was assigned a lease of a purpose-built apartment in Dunmow in July 2008. The question was if we could estimate the premium would likely be to prolong the lease by 90 years. Comparative flats in Dunmow with 100 year plus lease were worth £275,000. The average amount of ground rent was £45 collected per annum. The lease elapsed in 2095. Considering the 69 years remaining we approximated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 exclusive of expenses.
In 2011 we were e-mailed by Mr Felix Stewart who, having owned a garden apartment in Dunmow in June 1997. The dilemma was if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Comparable homes in Dunmow with a long lease were in the region of £216,000. The mid-range amount of ground rent was £60 billed quarterly. The lease lapsed on 2 August 2084. Given that there were 58 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £28,500 and £33,000 exclusive of legals.