It’s an underpublicised certainty that a Mortimer residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Mortimer property market.Once your lease nears 85ish years, you need to 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 dips below eighty years - otherwise a higher premium will be due. Most flat owners in Mortimer will be able to extend under the legislation; however a lawyer should be able to confirm whether you qualify for an extension. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
Leasehold premises in Mortimer with in excess of one hundred years outstanding on the lease are sometimes 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 reversionary interest unless savings on ground rent and estate charges warrant 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Mortimer can be a difficult process. We recommend you secure professional help from a conveyancing solicitor and surveyor with experience in this area.
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 in-depth market knowledge procuring Mortimer lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Following unsuccessful correspondence with the freeholder of her one bedroom apartment in Mortimer, Millie commenced the lease extension process just as the lease was nearing the all-important 80-year threshold. The transaction was concluded in July 2009. The landlord’s costs were negotiated to approximately 500 pounds.
Last Summer we were approach by Mr Finn Murphy , who owned a one bedroom flat in Mortimer in February 2003. We are asked if we could estimate the compensation to the landlord could be to extend the lease by ninety years. Identical properties in Mortimer with 100 year plus lease were worth £275,000. The average amount of ground rent was £65 billed annually. The lease ended on 27 April 2092. Having 68 years unexpired we calculated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 exclusive of expenses.
Ms U Peterson moved into a purpose-built flat in Mortimer in April 1996. The dilemma was if we could approximate the price would likely be to prolong the lease by a further 90 years. Similar properties in Mortimer with an extended lease were in the region of £213,600. The average ground rent payable was £60 collected yearly. The lease concluded on 9 January 2081. Taking into account 57 years remaining we calculated the compensation to the freeholder to extend the lease to be within £30,400 and £35,200 plus expenses.