If you are facing a significant premium because your lease in Dyserth has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Top reasons for lease extension now:
A Dyserth lease depreciates with the years remaining on the lease.
It’s an underpublicised truth that a Dyserth residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Dyserth property prices.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If the number of years remaining falls below eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Dyserth will be able to extend under the legislation; however a conveyancer will be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor for the duration of the process.
An extended lease is almost the same value as a freehold
Leasehold residencies in Dyserth with more than one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
Lenders may decide not to loan monies on a short lease
Mortgage lenders are less likely to give a mortgage on a domestic property in Dyserth with a short lease. Some lenders simply refuse to lend on leases with less than 75 years remaining.
| 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.
|
| Halifax |
Minimum 70 years from the date of the mortgage.
|
| Skipton Building Society |
85 years from the date of completion of the mortgage
For Buy to Let cases:
- lettings must not breach any of the lessee’s covenants; and
- consent of the lessor to lettings must be obtained if necessary
|
| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
|
Why use us for your lease extension in Dyserth?
The lawyers that we work with handle Dyserth 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 conveyancer we work with provide it.
Dyserth Lease Extension Case Studies:
Dexter, Dyserth, Denbighshire
During the course of the last few months Dexter, came precariously near to the 80-year mark with the lease on his one bedroom apartment in Dyserth. In buying his flat twenty years ago, the unexpired term was of minimal relevance. Thankfully, he became aware that he needed to take steps soon on Extending the lease. Dexter extended the lease just under the wire last June. Dexter and the freeholder ultimately agreed on sum of £5,500 . If he failed to meet the deadline, the amount would have gone up by a minimum £1,075.
Dyserth case:
Dr Thomas Peterson purchased a first floor flat in Dyserth in September 2002. We are asked if we could estimate the premium would likely be to extend the lease by ninety years. Comparable residencies in Dyserth with a long lease were valued about £216,000. The mid-range ground rent payable was £60 billed annually. The lease elapsed on 11 October 2084. Considering the 58 years left we approximated the premium to the landlord to extend the lease to be between £28,500 and £33,000 not including professional charges.
Dyserth case:
Dr I Ali completed a garden flat in Dyserth in May 1997. We are asked if we could shed any light on how much (approximately) price would be for a ninety year lease extension. Comparative flats in Dyserth with a long lease were worth £205,000. The average ground rent payable was £50 invoiced per annum. The lease ran out in 2104. Considering the 78 years left we estimated the compensation to the freeholder for the lease extension to be between £7,600 and £8,800 exclusive of costs.