Unfortunately that a Dalston residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Dalston property market.Where your lease has approximately 90 years left, you should start considering a lease extension. If the number of years remaining drops below eighty years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most leasehold owners in Dalston will be able to extend under the legislation; however a lawyer should be able to clarify if you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
Leasehold premises in Dalston with in excess of 100 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 property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with undertake Dalston 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.
Twenty four months ago Owen, started to get close to the eighty-year mark with the lease on his studio apartment in Dalston. In buying his home two decades ago, the lease term was of minimal relevance. As luck would have it, he recognised he needed to take action soon on a lease extension. Owen arranged for a lease extension just under the wire in January. Owen and the landlord eventually settled on a premium of £5,000 . If the lease had fallen to less than eighty years, the amount would have increased by at least £1,050.
Last Summer we were contacted by Dr N Díaz , who completed a purpose-built apartment in Dalston in January 2011. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year lease extension. Comparable flats in Dalston with an extended lease were in the region of £208,600. The mid-range ground rent payable was £60 billed quarterly. The lease lapsed on 2 May 2081. Having 57 years outstanding we approximated the premium to the freeholder to extend the lease to be between £30,400 and £35,200 exclusive of legals.
An example of a Freehold Enfranchisement case for a Dalston premises is 150 Amhurst Road in December 2013. The tribunal concluded that the premium to be paid by the applicant for the enfranchisement of the subject property was £43,500. This case was in relation to 4 flats. The unexpired term as at the valuation date was 90 (or thereabouts).