When it comes to domestic leasehold premises in Dalston, you are actually purchasing a right to reside in a property for a set period of time. In recent years flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you should consider a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately greater especially once there are fewer than eighty years remaining. Residents in Dalston with a lease approaching 81 years remaining should seriously consider extending it as soon as possible. When the lease term has less than eighty years remaining, under the relevant statute the landlord can calculate and charge a greater amount, assessed on a technical calculation, known as “marriage value” which is payable.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Dalston,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Dalston valuers.
Following protracted correspondence with the freeholder of her one bedroom flat in Dalston, Lily initiated the lease extension process just as the lease was nearing the critical eighty-year mark. The transaction was finalised in April 2011. The freeholder’s fees were restricted to a tad over 500 pounds.
Last Summer we were approach by Mr and Mrs. N Ali , who bought a one bedroom flat in Dalston in November 2006. We are asked if we could approximate the price would likely be for a 90 year extension to my lease. Comparative residencies in Dalston with 100 year plus lease were in the region of £205,000. The average amount of ground rent was £50 collected annually. The lease finished in 2104. Having 79 years outstanding we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 plus professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Dalston flat 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 affected 4 flats. The unexpired residue of the current lease was 90 (or thereabouts).