Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will usually be granted for a fixed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Dunvant. Clearly, the length of lease remaining shortens over time. This may slip by relatively unnoticed when the property needs to be sold or re-mortgaged. The fewer the years remaining the less it is worth and the more expensive it will be to extend the lease. Eligible leaseholders in Dunvant have the legal entitlement to extend the lease for an additional ninety years under Leasehold Reform legislation. Do give due attention before putting off your Dunvant lease extension. Holding off the cost now simply increases the price you will ultimately incur to extend your lease
Leasehold properties in Dunvant with over 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges justify it.
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Yorkshire 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. |
Using our service will provide you better control over the value of your Dunvant leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Kai was the the leasehold owner of a studio apartment in Dunvant being sold with a lease of just over 59 years unexpired. Kai on an informal basis approached his landlord being a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £200 annually. Ordinarily, ground rent would not be payable on a lease extension were Kai to exercise his statutory right. Kai procured expert legal guidance and secured satisfactory deal without going to tribunal and ending up with a market value flat.
Last Autumn we were phoned by Mr and Mrs. C Hill , who acquired a recently refurbished flat in Dunvant in March 2008. The dilemma was if we could approximate the premium would likely be for a ninety year lease extension. Identical flats in Dunvant with an extended lease were worth £210,000. The average ground rent payable was £50 invoiced per annum. The lease came to a finish in 2106. Given that there were 80 years unexpired we calculated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 plus fees.
Mr V Reed was assigned a lease of a ground floor flat in Dunvant in July 1995. We are asked if we could shed any light on how much (approximately) premium would be for a ninety year extension to my lease. Comparative homes in Dunvant with an extended lease were valued about £275,000. The average amount of ground rent was £45 invoiced yearly. The lease finished on 1 August 2095. Taking into account 69 years remaining we approximated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 exclusive of costs.