The re-sale value of a leasehold property in New Malden is impacted by how long the lease has remaining. If it is close to or fewer than eighty years you should foresee problems on re-sale, so it is recommended to arrange for a lease extension ahead of buying. It is ideal to start the process of extending the lease is when a lease still has 82 years remaining so that all matters can be concluded in advance of the eighty year cut off point. Current legislation entitles New Malden qualifying lessees to acquire a lease extension of 90 years in addition to the remaining length of the lease at a peppercorn rent (that is, rent free). The intention of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
The conveyancing solicitors that we work with undertake New Malden 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.
After unsuccessful correspondence with the landlord of her purpose-built flat in New Malden, Harriet commenced the lease extension process just as the lease was approaching the all-important 80-year mark. The lease extension was finalised in April 2009. The landlord’s charges were kept to an absolute minimum.
Last Spring we were called by Mr W Thomas , who purchased a ground floor flat in New Malden in September 1996. We are asked if we could estimate the price would be for a ninety year lease extension. Identical properties in New Malden with a long lease were valued about £166,400. The average amount of ground rent was £60 collected annually. The lease came to a finish on 24 October 2080. Taking into account 54 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £32,300 and £37,400 plus legals.
An example of a Lease Extension case for a New Malden property is Flat D 15 Claremont Gardens in September 2013. TheTribunal determined in accordance with section48 and Schedule13 of the Leasehold Reform,Housing and Urban Development Act 1993 that the premium for the extended lease should be fourteen thousand one hundred and eighty seven pounds (£14,187.00) This case was in relation to 1 flat.