It’s a harsh certainty that a Maulden residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Maulden property market.Once your lease gets to 85ish years, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips under 80 years - otherwise a higher premium will be payable. Most leasehold owners in Maulden will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. In some cases you may not be entitled. 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 lawyer from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| 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. |
| 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. |
Lease extensions in Maulden can be a difficult process. We recommend you obtain professional help from a conveyancing solicitor and valuer with experience in lease extensions.
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 October Aiden, came perilously close to the eighty-year threshold with the lease on his ground floor flat in Maulden. Having purchased his property two decades ago, the unexpired term was of little importance. by good luck, he realised he would imminently be paying an inflated amount for Extending the lease. Aiden arranged for a lease extension at the eleventh hour last March. Aiden and the landlord in the end settled on sum of £5,000 . If he not met the deadline, the amount would have escalated by at least £850.
Last Summer we were approach by Mrs Isabelle Sharif , who purchased a ground floor flat in Maulden in February 2004. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Similar flats in Maulden with an extended lease were worth £295,000. The average amount of ground rent was £50 collected quarterly. The lease concluded on 25 July 2100. Having 75 years left we calculated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of expenses.
Mr and Mrs. K Michel purchased a one bedroom flat in Maulden in September 2004. We are asked if we could estimate the premium would likely be for a 90 year lease extension. Comparable premises in Maulden with an extended lease were worth £250,400. The average ground rent payable was £65 collected quarterly. The lease elapsed on 24 May 2089. Considering the 64 years outstanding we estimated the premium to the freeholder to extend the lease to be within £19,000 and £22,000 not including costs.