Mortimer leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. The majority of owners of residential leasehold property in Mortimer enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Mortimer you would be well advised to investigate if your lease has between seventy and ninety years remaining. There are good reasons why a Mortimer leaseholder with a lease having around 80 years remaining should take steps to ensure that a lease extension is effected without delay
Leasehold residencies in Mortimer with over one hundred 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 property. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and maintenance 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 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake Mortimer 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 lawyer we work with provide it.
After lengthy negotiations with the freeholder of her purpose-built apartment in Mortimer, Sophia commenced the lease extension process just as the lease was coming close to the critical eighty-year deadline. The lease extension was concluded in August 2009. The landlord’s fees were negotiated to a tad over 500 GBP.
Mr and Mrs. N Mason took over the lease of a first floor apartment in Mortimer in September 1995. We are asked if we could estimate the price would likely be to prolong the lease by ninety years. Comparable properties in Mortimer with a long lease were in the region of £206,200. The mid-range amount of ground rent was £60 billed yearly. The lease terminated in 2081. Taking into account 56 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £31,400 and £36,200 not including costs.
In 2014 we were called by Mr J Nguyen who, having acquired a garden apartment in Mortimer in June 2001. The question was if we could approximate the price could be to extend the lease by ninety years. Comparative flats in Mortimer with an extended lease were in the region of £200,000. The average amount of ground rent was £50 collected annually. The lease elapsed on 1 July 2102. Given that there were 77 years remaining we calculated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of fees.