The market value of New Malden leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate materialy once the remaining term is less than eighty years
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 45 years remaining, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
The conveyancers that we work with handle 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 lawyer we work with provide it.
Subsequent to unsuccessful discussions with the landlord of her purpose-built flat in New Malden, Maisie initiated the lease extension process just as the lease was coming close to the crucial 80-year mark. The transaction completed in August 2009. The landlord’s fees were restricted to a tad over 450 GBP.
Last Spring we were phoned by Dr N Watson , who was assigned a lease of a studio apartment in New Malden in June 1996. The question was if we could shed any light on how much (approximately) premium could be to prolong the lease by 90 years. Comparable residencies in New Malden with 100 year plus lease were in the region of £173,800. The average amount of ground rent was £65 invoiced yearly. The lease finished in 2080. Taking into account 55 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £31,400 and £36,200 not including legals.
An example of a Lease Extension decision 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 related to 1 flat.