Chances are that if you own a flat in Mildmay you actually own a long leasehold interest over your property
Leasehold premises in Mildmay with over 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in buying the reversionary interest 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Mildmay,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Mildmay valuers.
Eli owned a 2 bedroom flat in Mildmay on the market with a lease of just over 72 years remaining. Eli informally approached his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Eli to exercise his statutory right. Eli procured expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
In 2014 we were e-mailed by Mrs Bethan Jackson who, having bought a basement flat in Mildmay in April 2000. The question was if we could estimate the premium would likely be for a 90 year extension to my lease. Identical flats in Mildmay with 100 year plus lease were valued around £300,000. The mid-range amount of ground rent was £50 collected annually. The lease lapsed on 1 September 2101. Having 75 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 not including costs.
Mr and Mrs. K Evans was assigned a lease of a newly refurbished flat in Mildmay in July 2012. The dilemma was if we could approximate the price would be for a ninety year lease extension. Identical premises in Mildmay with an extended lease were worth £250,400. The mid-range ground rent payable was £65 billed monthly. The lease concluded in 2090. Having 64 years unexpired we estimated the premium to the landlord to extend the lease to be between £19,000 and £22,000 exclusive of professional charges.