Dymock residential property held on a long lease is a depreciating asset as the leaseholder only owns the property for a set term.
Leasehold residencies in Dymock with more than one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify it.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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. |
The conveyancing solicitors that we work with handle Dymock 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 conveyancing solicitor we work with provide it.
In 2014 Harry, started to get near to the eighty-year threshold with the lease on his first floor flat in Dymock. Having bought his property 18 years previously, the unexpired term was of little bearing. Thankfully, he noticed he needed to take action soon on Extending the lease. Harry was able to extend his lease just ahead of time last May. Harry and the freeholder ultimately agreed on sum of £5,500 . If the lease had fallen below 80 years, the price would have increased by a minimum £1,050.
In 2013 we were phoned by Mr and Mrs. F Walker who, having owned a recently refurbished flat in Dymock in January 2005. We are asked if we could estimate the premium would be for a ninety year lease extension. Comparative flats in Dymock with 100 year plus lease were in the region of £200,800. The mid-range amount of ground rent was £65 collected yearly. The lease terminated in 2085. Given that there were 60 years left we calculated the premium to the freeholder for the lease extension to be between £20,900 and £24,200 exclusive of expenses.
Mr Ali Michel owned a basement apartment in Dymock in October 2001. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by ninety years. Comparable residencies in Dymock with 100 year plus lease were valued around £260,000. The average amount of ground rent was £50 billed annually. The lease termination date was on 7 October 2096. Taking into account 71 years remaining we approximated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 not including costs.