As the the remaining lease term of a Maryland residential lease diminished so does its value and therefore the value of your property. Where the residual term has, in excess of 99 years remaining then this decrease may be of little impact however there will become a stage when a lease has fewer than eighty years left as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the primary reason why you should extend the lease sooner than later. Most flat owners in Maryland will meet the qualifying criteria; that being said a lawyer will be able to advise if you qualify for a lease extension. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
It is generally accepted that a residential leasehold with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Maryland can be a difficult process. We recommend you get professional help from a conveyancing solicitor and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Maryland lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Elijah was the the leasehold owner of a conversion flat in Maryland being sold with a lease of fraction over 61 years remaining. Elijah on an informal basis contacted his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Elijah to invoke his statutory right. Elijah procured expert legal guidance and was able to make an informed decision and deal with the matter and readily saleable.
In 2009 we were contacted by Mr H Thomas who, having bought a basement flat in Maryland in July 2010. We are asked if we could approximate the premium would likely be for a ninety year lease extension. Similar flats in Maryland with 100 year plus lease were valued around £250,400. The mid-range amount of ground rent was £65 billed yearly. The lease terminated in 2090. Given that there were 64 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £19,000 and £22,000 not including legals.
An example of a Lease Extension decision for a Maryland flat is 151A Ham Park Road in May 2010. The matter came before the Tribunal by way of a vesting order made on 12 June 2009 Deputy District Judge Coonan in Bow County Court. The tribunal decided that the sum payable for the m to be paid for the lease extension was £21,445 This case related to 1 flat.