Owning a flat usually means owning a lease of the property, which has a set term of years. The lease will normally be granted for a prescribed period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Mitcham. Clearly, the term of lease left shortens as time goes by. This is often ignored and only raises itself as an issue when the flat or house has to be disposed of or refinanced. The fewer the years remaining the less it is worth and the more expensive it will be to procure a lease extension. Eligible long lease owners in Mitcham have the right to extend the lease for an additional 90 years under statute. You should give careful deliberation before delaying your Mitcham lease extension. Holding off the cost now likely increases the price you will ultimately incur to extend your lease
Leasehold premises in Mitcham with more than 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service gives you increased control over the value of your Mitcham leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Omar owned a studio flat in Mitcham on the market with a lease of a few days over 61 years left. Omar on an informal basis spoke with his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 per annum. Ordinarily, ground rent would not be due on a lease extension were Omar to exercise his statutory right. Omar procured expert advice and was able to make an informed decision and deal with the matter and sell the property.
Last Spring we were approach by Mr and Mrs. B André , who was assigned a lease of a studio flat in Mitcham in January 2005. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year extension to my lease. Similar premises in Mitcham with a long lease were worth £257,800. The mid-range ground rent payable was £65 collected monthly. The lease ran out on 16 June 2090. Considering the 65 years unexpired we estimated the premium to the landlord to extend the lease to be within £18,100 and £20,800 plus expenses.
An example of a Freehold Enfranchisement decision for a Mitcham flat is 50 & 52 Southcroft Road in September 2013. The tribunals own valuation determined that the premium payable should be £29,000 This case related to 2 flats. The unexpired residue of the current lease was 86.11 and 60.64.