Dartmouth Park leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Dartmouth Park residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Dartmouth Park you really ought to check if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Dartmouth Park with over one hundred years outstanding 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 home. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you increased control over the value of your Dartmouth Park leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last October Jason, started to get near to the eighty-year mark with the lease on his one bedroom flat in Dartmouth Park. Having bought his property 19 years ago, the unexpired term was of little interest. As luck would have it, he became aware that he would imminently be paying an inflated amount for a lease extension. Jason arranged for a lease extension just in the nick of time in January. Jason and the freeholder subsequently settled on sum of £5,500 . If the lease had slipped lower than 80 years, the amount would have become more costly by at least £1,025.
In 2013 we were called by Ms Georgina Howard who, having bought a one bedroom apartment in Dartmouth Park in September 2011. The question was if we could shed any light on how much (roughly) price would be for a ninety year extension to my lease. Comparable properties in Dartmouth Park with a long lease were worth £201,200. The mid-range amount of ground rent was £55 billed every twelve months. The lease came to a finish in 2081. Given that there were 56 years unexpired we estimated the compensation to the landlord to extend the lease to be within £31,400 and £36,200 not including professional charges.
An example of a Lease Extension decision for a Dartmouth Park flat is Flat 2 27 Mackeson Road in December 2012. The Tribunal assessed the value of the lease extension premium at £35,435 and rounded the figure to £35,500 This case was in relation to 1 flat. The unexpired lease term was 64.77 years.