For those whose Maulden property is held on a long lease, the message is clear – if nothing is done, your property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more it will cost to procure a lease extension.
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| Yorkshire 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. |
The conveyancing solicitors that we work with procure Maulden 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 conveyancer we work with provide it.
After unsuccessful correspondence with the freeholder of her first floor apartment in Maulden, Emma started the lease extension process as the eighty year mark was rapidly approaching. The lease extension was finalised in August 2015. The landlord’s charges were negotiated to about 450 pounds.
Dr Ella Murphy bought a garden apartment in Maulden in August 2002. The dilemma was if we could estimate the compensation to the landlord would likely be to prolong the lease by 90 years. Identical homes in Maulden with 100 year plus lease were valued about £300,000. The average ground rent payable was £50 collected annually. The lease termination date was on 23 September 2102. Taking into account 76 years left we estimated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of costs.
Last March we were phoned by Dr B Martinez , who completed a recently refurbished apartment in Maulden in July 2010. The question was if we could shed any light on how much (roughly) price would be to prolong the lease by a further 90 years. Comparable premises in Maulden with 100 year plus lease were valued around £257,800. The mid-range amount of ground rent was £65 collected monthly. The lease terminated in 2091. Having 65 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £17,100 and £19,800 exclusive of legals.