It’s an underpublicised truth that a Maldon residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Maldon property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips lower than 80 years - otherwise a higher amount will be payable. Most flat owners in Maldon will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as 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; |
| 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. |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Maldon,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Maldon valuers.
Edward owned a high value apartment in Maldon on the market with a lease of fraction over 72 years remaining. Edward on an informal basis contacted his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Edward to exercise his statutory right. Edward procured expert advice and secured satisfactory resolution informally and sell the flat.
Mr and Mrs. S Michel owned a one bedroom flat in Maldon in November 1995. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Similar homes in Maldon with an extended lease were worth £235,200. The mid-range amount of ground rent was £45 collected annually. The lease came to a finish on 23 October 2092. Taking into account 66 years remaining we estimated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 plus legals.
Mrs L Laurent owned a recently refurbished flat in Maldon in November 2001. We are asked if we could estimate the compensation to the landlord would be for a ninety year lease extension. Similar properties in Maldon with an extended lease were valued around £275,000. The average amount of ground rent was £55 collected monthly. The lease ended in 2103. Given that there were 77 years remaining we approximated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 not including expenses.