Mortlake 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 gets more expensive. Legislation has been in place for sometime now allowing qualifying Mortlake residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Mortlake you really ought to see if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold premises in Mortlake with in excess of 100 years left on the lease are sometimes referred to as ‘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 upside in purchasing the freehold unless savings on ground rent and estate 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The lawyers that we work with undertake Mortlake 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 conveyancer we work with provide it.
Harrison was the the leasehold proprietor of a 2 bedroom apartment in Mortlake being sold with a lease of a few days over 59 years remaining. Harrison on an informal basis approached his freeholder being a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Harrison to exercise his statutory right. Harrison procured expert legal guidance and secured satisfactory deal informally and sell the flat.
Mr and Mrs. C Clarke was assigned a lease of a basement apartment in Mortlake in February 1998. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by 90 years. Similar properties in Mortlake with 100 year plus lease were valued about £189,000. The average ground rent payable was £55 collected annually. The lease terminated in 2077. Taking into account 53 years as a residual term we estimated the premium to the landlord to extend the lease to be within £28,500 and £33,000 plus professional charges.
An example of a Freehold Enfranchisement decision for a Mortlake property is 19 St. Margarets Crescent in August 2010. the tribunal was of the view that the premium to be paid by the leaseholder for the freehold reversion was £51,983.00 This case was in relation to 3 flats. The unexpired term was 66.25 years.