Mudeford residential property held on a long lease is a depreciating asset because a leaseholder only owns the property for a set term.
Leasehold properties in Mudeford with in excess of 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The lawyers that we work with handle Mudeford 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 conveyancing solicitor we work with provide it.
Jack was the the leasehold owner of a conversion flat in Mudeford being sold with a lease of just over fifty eight years unexpired. Jack on an informal basis contacted his landlord a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £100 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Jack to invoke his statutory right. Jack procured expert legal guidance and was able to make an informed decision and deal with the matter and readily saleable.
In 2012 we were called by Mr and Mrs. E Hill who, having completed a ground floor flat in Mudeford in August 1997. We are asked if we could shed any light on how much (roughly) price would be for a 90 year extension to my lease. Identical residencies in Mudeford with 100 year plus lease were worth £166,400. The mid-range ground rent payable was £60 billed annually. The lease expired on 2 June 2078. Having 54 years remaining we estimated the compensation to the freeholder for the lease extension to be between £32,300 and £37,400 plus legals.
Last Christmas we were called by Mrs E Fournier , who purchased a purpose-built apartment in Mudeford in February 2000. We are asked if we could shed any light on how much (roughly) premium could be for a 90 year extension to my lease. Comparable residencies in Mudeford with an extended lease were worth £227,800. The mid-range amount of ground rent was £45 invoiced every twelve months. The lease came to a finish in 2089. Taking into account 65 years left we estimated the premium to the landlord to extend the lease to be between £13,300 and £15,400 exclusive of fees.