Unfortunately that a Mitcham Junction residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Mitcham Junction property prices.Where your lease has approximately 90 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 falls under 80 years - otherwise a higher amount will be payable. The majority of flat owners in Mitcham Junction will be able to extend under the legislation; however a conveyancer will be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
It is generally considered that a residential leasehold with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
Engaging our service will provide you increased control over the value of your Mitcham Junction leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Kai was the the leasehold proprietor of a high value apartment in Mitcham Junction on the market with a lease of fraction over sixty years remaining. Kai on an informal basis contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Kai to invoke his statutory right. Kai procured expert advice and secured satisfactory resolution without going to tribunal and ending up with a market value flat.
Last year we were contacted by Mr Callum Morris , who owned a first floor flat in Mitcham Junction in February 1999. We are asked if we could approximate the premium would likely be for a 90 year extension to my lease. Similar premises in Mitcham Junction with a long lease were in the region of £223,400. The mid-range amount of ground rent was £60 billed quarterly. The lease ended on 23 February 2085. Taking into account 59 years remaining we approximated the premium to the freeholder to extend the lease to be within £27,600 and £31,800 plus expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a Mitcham Junction flat is 50 & 52 Southcroft Road in September 2013. The tribunals own valuation determined that the premium payable should be £29,000 This case affected 2 flats. The remaining number of years on the lease was 86.11 and 60.64.