Mudeford leases on residential properties are gradually decreasing 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 Mudeford enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Mudeford you must see if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Mudeford with more than 100 years unexpired 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 reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Retaining our service will provide you enhanced control over the value of your Mudeford leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Trailing lengthy correspondence with the freeholder of her one bedroom apartment in Mudeford, Alisha commenced the lease extension process just as the lease was coming close to the crucial 80-year deadline. The lease extension was concluded in April 2005. The landlord’s costs were kept to an absolute minimum.
Last year we were phoned by Mr T Collins , who completed a garden flat in Mudeford in February 2004. We are asked if we could estimate the premium would likely be to extend the lease by 90 years. Identical properties in Mudeford with an extended lease were worth £173,800. The mid-range ground rent payable was £65 collected annually. The lease finished on 24 November 2081. Considering the 55 years unexpired we estimated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 plus fees.
Mr G García acquired a basement apartment in Mudeford in November 2007. We are asked if we could estimate the premium could be to extend the lease by a further 90 years. Comparable homes in Mudeford with an extended lease were in the region of £235,200. The average amount of ground rent was £45 invoiced annually. The lease lapsed in 2092. Taking into account 66 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 not including expenses.