Maulden leases on residential properties are gradually losing 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 Maulden tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Maulden you must investigate if your lease has between seventy and ninety years left. There are good reasons why a Maulden leaseholder with a lease having around eighty years unexpired should take action to ensure that a lease extension is actioned without delay
Leasehold residencies in Maulden with over 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges merit it.
| 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; |
| 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. |
| Godiva Mortgages | 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. |
| 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. |
Lease extensions in Maulden can be a difficult process. We recommend you procure guidance from a lawyer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Maulden lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last year Harry, came very close to the eighty-year mark with the lease on his basement apartment in Maulden. Having purchased his property two decades ago, the lease term was of little bearing. Luckily, he recognised he needed to take steps soon on a lease extension. Harry arranged for a lease extension just under the wire last January. Harry and the landlord who owned the flat above ultimately agreed on the final figure of £5,000 . If the lease had slipped lower than eighty years, the sum would have gone up by a minimum £900.
Mr V Jackson bought a one bedroom flat in Maulden in October 1998. The question was if we could estimate the price would likely be to extend the lease by 90 years. Identical premises in Maulden with 100 year plus lease were in the region of £166,800. The mid-range ground rent payable was £50 billed annually. The lease came to a finish in 2075. Given that there were 50 years unexpired we estimated the premium to the landlord to extend the lease to be within £32,300 and £37,400 plus costs.
Mr and Mrs. U Mason completed a purpose-built flat in Maulden in January 2001. The dilemma was if we could estimate the price would likely be to extend the lease by ninety years. Comparative residencies in Maulden with 100 year plus lease were valued around £280,000. The mid-range ground rent payable was £45 collected quarterly. The lease ended on 13 March 2095. Considering the 70 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 exclusive of costs.