Dunmow leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now which entitles qualifying Dunmow residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Dunmow you really ought to check if your lease has between seventy and 90 years left. There are compelling reasons why a Dunmow flat owner with a lease having around eighty years unexpired should take action to make sure that a lease extension is actioned without delay
It is generally considered that a residential leasehold with more than 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
Lender | Requirement |
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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; |
Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
Halifax | Minimum 70 years from the date of the mortgage. |
TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with procure Dunmow 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.
Following lengthy negotiations with the freeholder of her first floor flat in Dunmow, Sarah commenced the lease extension process as the 80 year threshold was quickly advancing. The transaction completed in November 2014. The freeholder’s costs were kept to an absolute minimum.
Dr L Cook completed a purpose-built apartment in Dunmow in November 2003. We are asked if we could shed any light on how much (roughly) premium would likely be to prolong the lease by ninety years. Similar flats in Dunmow with a long lease were valued about £206,200. The mid-range amount of ground rent was £55 invoiced annually. The lease came to a finish on 15 March 2081. Having 56 years unexpired we calculated the premium to the landlord for the lease extension to be within £31,400 and £36,200 exclusive of fees.
In 2009 we were called by Mr and Mrs. T Scott who, having moved into a one bedroom apartment in Dunmow in June 2008. 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 residencies in Dunmow with 100 year plus lease were worth £300,000. The mid-range amount of ground rent was £50 invoiced every twelve months. The lease lapsed in 2101. Given that there were 76 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 plus professional charges.