Matlock leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Matlock tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Matlock you must see if your lease has between seventy and 90 years remaining. There are compelling reasons why a Matlock flat owner with a lease having around 80 years unexpired should take steps to ensure that a lease extension is put in place without delay
Leasehold premises in Matlock with over 100 years unexpired 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 to be gained by buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service gives you increased control over the value of your Matlock leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Twenty four months ago Jake, came dangerously close to the 80-year threshold with the lease on his leasehold flat in Matlock. In buying his home 19 years previously, the length of the lease was of no importance. As luck would have it, it dawned on him that he needed to take steps soon on a lease extension. Jake was able to extend his lease at the eleventh hour in June. Jake and the landlord ultimately settled on sum of £5,500 . If the lease had dipped lower than eighty years, the sum would have increased by a minimum £975.
In 2010 we were e-mailed by Mr and Mrs. T Laurent who, having bought a ground floor apartment in Matlock in May 2010. The question was if we could estimate the premium would be for a ninety year lease extension. Comparable residencies in Matlock with a long lease were valued around £290,000. The mid-range ground rent payable was £45 invoiced per annum. The lease ran out in 2100. Having 74 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of professional charges.
Dr Lewis Patel owned a garden apartment in Matlock in November 1996. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year extension to my lease. Identical residencies in Matlock with 100 year plus lease were valued about £243,000. The mid-range amount of ground rent was £65 invoiced every twelve months. The lease termination date was in 2089. Given that there were 63 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £20,000 and £23,000 not including fees.