Unfortunately that a Dunston residential lease is a wasting 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 depreciation being disguised by increases in the Dunston property prices.Once your lease nears 85ish years, you should start considering 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 Dunston will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is generally accepted that a property with over 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 30 years left, the residence will be worth the same as 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
The conveyancing solicitors that we work with undertake Dunston 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.
During the course of the last few months Ben, came seriously near to the 80-year threshold with the lease on his one bedroom flat in Dunston. In buying his property twenty years ago, the length of the lease was of minimal concern. Luckily, he noticed he needed to take action soon on Extending the lease. Ben was able to extend his lease just in the nick of time last April. Ben and the freeholder subsequently settled on an amount of £5,500 . If the lease had slipped lower than eighty years, the sum would have escalated by at least £1,125.
Mr and Mrs. P Norbert purchased a basement apartment in Dunston in January 2008. We are asked if we could estimate the price could be for a ninety year lease extension. Similar homes in Dunston with a long lease were valued around £201,200. The mid-range amount of ground rent was £55 collected quarterly. The lease termination date was in 2081. Having 56 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £31,400 and £36,200 plus professional charges.
Last November we were e-mailed by Dr Louise Williams , who took over the lease of a studio flat in Dunston in November 2009. We are asked if we could estimate the premium could be for a ninety year extension to my lease. Comparable homes in Dunston with 100 year plus lease were in the region of £300,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease lapsed on 26 April 2101. Having 76 years outstanding we calculated the premium to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of professional charges.