With a long leasehold premises in New Malden, you are actually purchasing a right to live in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you should consider a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately greater especially once there are fewer than 80 years left. Leasehold owners in New Malden with a lease drawing near to 81 years left should seriously consider extending it sooner rather than later. Once the lease term has under eighty years outstanding, under the relevant legislation the landlord is entitled to calculate and charge a greater premium, based on a technical calculation, known as “marriage value” which is due.
It is generally accepted that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 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. |
Engaging our service will provide you increased control over the value of your New Malden leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year Benjamin, came very near to the 80-year mark with the lease on his garden apartment in New Malden. In buying his property 18 years ago, the unexpired term was of no bearing. Thankfully, he recognised he needed to take action soon on a lease extension. Benjamin was able to extend his lease just ahead of time last May. Benjamin and the landlord subsequently settled on the final figure of £6,000 . If he had missed the deadline, the sum would have become more exhorbitant by at least £850.
Mrs Yasmin Sharif completed a first floor apartment in New Malden in April 2011. The dilemma was if we could estimate the compensation to the landlord would likely be to extend the lease by an additional years. Comparable flats in New Malden with an extended lease were in the region of £250,000. The mid-range amount of ground rent was £50 collected monthly. The lease elapsed in 2095. Given that there were 69 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 not including professional charges.
An example of a Lease Extension matter before the tribunal for a New Malden premises 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 related to 1 flat.