Merton Park leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. The majority of owners of residential leasehold property in Merton Park enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Merton Park you should see if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Merton Park with over one hundred years remaining 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 property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges merit it.
| 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; |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Merton Park can be a difficult process. We recommend you get guidance from a lawyer and valuer with experience in lease extensions.
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 in-depth market knowledge procuring Merton Park lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Twenty four months ago Teddy, came dangerously close to the eighty-year mark with the lease on his studio flat in Merton Park. In buying his home two decades ago, the unexpired term was of little relevance. Fortunately, he became aware that he would imminently be paying an escalated premium for a lease extension. Teddy was able to extend his lease at the eleventh hour last September. Teddy and the landlord who owned the flat above subsequently settled on a premium of £6,000 . If the lease had fallen below eighty years, the figure would have become more costly by a minimum £975.
Last Christmas we were called by Mr Connor Murphy , who owned a purpose-built apartment in Merton Park in April 2005. We are asked if we could shed any light on how much (approximately) premium would be to extend the lease by a further 90 years. Comparable properties in Merton Park with an extended lease were worth £300,000. The average ground rent payable was £50 invoiced every twelve months. The lease elapsed on 20 July 2101. Considering the 75 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of fees.
An example of a Lease Extension matter before the tribunal for a Merton Park premises is 14 Nutwell Street in January 2014. The premium payable for the acquisition of a new lease of the subject premises was in the sum of £30,523 This case related to 1 flat. The unexpired residue of the current lease was 62.94 years.