On the balance of probabilities if you own a flat in Mayfield you actually own a long leasehold interest over your property
Leasehold residencies in Mayfield with over 100 years left on the lease are often 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 to be gained by buying the reversionary interest unless savings on ground rent and service charges merit it.
| 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; |
| 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. |
| 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. |
The conveyancers that we work with handle Mayfield 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 conveyancing solicitor we work with provide it.
Subsequent to protracted negotiations with the landlord of her purpose-built flat in Mayfield, Olivia initiated the lease extension process just as the lease was coming close to the all-important 80-year threshold. The lease extension was concluded in October 2012. The landlord’s charges were kept to an absolute minimum.
Last Summer we were approach by Mr L James , who purchased a ground floor flat in Mayfield in April 2011. We are asked if we could estimate the price would be for a 90 year lease extension. Comparative homes in Mayfield with an extended lease were valued around £200,000. The average ground rent payable was £50 billed yearly. The lease came to a finish in 2104. Taking into account 78 years remaining we calculated the premium to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of costs.
In 2011 we were phoned by Mr Felix James who, having took over the lease of a basement flat in Mayfield in June 1997. The question was if we could shed any light on how much (roughly) price would likely be to extend the lease by a further 90 years. Identical premises in Mayfield with 100 year plus lease were in the region of £267,600. The mid-range ground rent payable was £65 billed per annum. The lease ended on 14 November 2093. Taking into account 67 years remaining we approximated the compensation to the landlord for the lease extension to be between £14,300 and £16,400 plus fees.