It’s an underpublicised certainty that a Dunvant residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Dunvant property market.Where your lease has approximately 90 years left, 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 falls under 80 years - otherwise a higher premium will be due. The majority of leasehold owners in Dunvant will be able to extend under the legislation; however a lawyer should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your lawyer for the duration of the process.
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you better control over the value of your Dunvant leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Finley owned a high value flat in Dunvant on the market with a lease of fraction over 72 years unexpired. Finley on an informal basis contacted his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Finley to invoke his statutory right. Finley procured expert legal guidance and was able to make an informed decision and deal with the matter and sell the flat.
Mr and Mrs. Y Martin acquired a basement flat in Dunvant in September 2005. We are asked if we could shed any light on how much (approximately) price could be for a 90 year extension to my lease. Similar premises in Dunvant with 100 year plus lease were valued about £206,200. The average amount of ground rent was £55 billed every twelve months. The lease ended in 2081. Taking into account 56 years outstanding we approximated the compensation to the landlord for the lease extension to be between £31,400 and £36,200 exclusive of legals.
In 2009 we were called by Mr I Campbell who, having completed a one bedroom flat in Dunvant in April 1999. The dilemma was if we could approximate the compensation to the landlord would likely be for a 90 year extension to my lease. Similar residencies in Dunvant with 100 year plus lease were worth £300,000. The mid-range amount of ground rent was £50 invoiced every twelve months. The lease came to a finish on 10 January 2101. Having 76 years remaining we calculated the premium to the landlord for the lease extension to be between £8,600 and £9,800 not including expenses.