The value of Mitcham Junction leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can increase materialy once the unexpired lease term is below than eighty years
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years left, the premises 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. |
| 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; |
| 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in Mitcham Junction,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 Mitcham Junction valuers.
In 2014 Evan, started to get close to the eighty-year threshold with the lease on his garden apartment in Mitcham Junction. Having purchased his home 18 years previously, the lease term was of minimal importance. Thankfully, he noticed he would soon be paying an escalated premium for a lease extension. Evan arranged for a lease extension at the eleventh hour last July. Evan and the freeholder in the end settled on sum of £5,000 . If he had missed the deadline, the figure would have increased by at least £1,150.
Last Christmas we were e-mailed by Mr and Mrs. J Flores , who was assigned a lease of a purpose-built flat in Mitcham Junction in June 1999. The dilemma was if we could approximate the price would likely be to extend the lease by ninety years. Identical properties in Mitcham Junction with an extended lease were in the region of £233,200. The mid-range ground rent payable was £60 collected annually. The lease came to a finish in 2087. Taking into account 61 years left we calculated the premium to the landlord for the lease extension to be between £22,800 and £26,400 not including costs.
An example of a Freehold Enfranchisement decision for a Mitcham Junction property is 50 & 52 Southcroft Road in September 2013. The tribunals own valuation determined that the premium payable should be £29,000 This case was in relation to 2 flats. The unexpired term was 86.11 and 60.64.