Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will normally be granted for a fixed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Maldon. Inevitably, the length of lease left shortens over time. This may slip by relatively unnoticed when the property needs to be sold or re-mortgaged. The shorter the lease the lower the value of the property and the more it will cost to obtain a lease extension. Eligible leaseholders in Maldon have the legal entitlement to extend the lease for an additional 90 years in accordance with legislation. Do give careful consideration before putting off your Maldon lease extension. Holding off the cost now only increases the price you will eventually have to pay to extend your lease
Leasehold properties in Maldon with in excess of 100 years outstanding on the lease are sometimes 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 upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
| 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. |
Engaging our service will provide you enhanced control over the value of your Maldon leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Aaron, came dangerously close to the eighty-year mark with the lease on his studio flat in Maldon. Having bought his home two decades ago, the length of the lease was of little concern. Fortunately, he realised he would soon be paying an escalated premium for Extending the lease. Aaron extended the lease just ahead of time last July. Aaron and the freeholder via the managing agents subsequently agreed on a premium of £6,000 . If the lease had dropped below 80 years, the premium would have gone up by at least £1,025.
In 2010 we were contacted by Mr and Mrs. B Brooks who, having took over the lease of a purpose-built flat in Maldon in August 2001. The dilemma was if we could shed any light on how much (roughly) premium could be for a 90 year lease extension. Identical homes in Maldon with 100 year plus lease were worth £280,000. The mid-range amount of ground rent was £55 invoiced yearly. The lease elapsed on 27 July 2103. Considering the 78 years left we calculated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 not including legals.
In 2013 we were phoned by Mrs Jasmine Reed who, having acquired a one bedroom flat in Maldon in April 2002. We are asked if we could shed any light on how much (roughly) premium would be to prolong the lease by a further 90 years. Comparative properties in Maldon with 100 year plus lease were valued around £191,000. The mid-range amount of ground rent was £65 collected every twelve months. The lease concluded in 2083. Having 58 years left we calculated the compensation to the landlord for the lease extension to be within £23,800 and £27,400 exclusive of costs.