Mitcheldean leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Most owners of residential leasehold property in Mitcheldean enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Mitcheldean you must see if your lease has between 70 and ninety years remaining. There are good reasons why a Mitcheldean leaseholder with a lease having around eighty years unexpired should take steps to ensure that a lease extension is effected without delay
Leasehold properties in Mitcheldean with in excess of 100 years unexpired 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 home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges justify 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 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you better control over the value of your Mitcheldean leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Ibrahim owned a 2 bedroom flat in Mitcheldean on the market with a lease of a little over 59 years left. Ibrahim informally approached his landlord being a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £125 yearly. No ground rent would be payable on a lease extension were Ibrahim to invoke his statutory right. Ibrahim obtained expert advice and secured an acceptable deal informally and sell the flat.
Last Autumn we were contacted by Mrs T Harris , who moved into a studio apartment in Mitcheldean in June 1999. The dilemma was if we could shed any light on how much (approximately) price would be to extend the lease by ninety years. Comparable homes in Mitcheldean with 100 year plus lease were worth £250,000. The mid-range ground rent payable was £50 invoiced annually. The lease lapsed in 2094. Considering the 68 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of costs.
Mr and Mrs. F François was assigned a lease of a one bedroom flat in Mitcheldean in January 2009. We are asked if we could shed any light on how much (approximately) premium would likely be for a 90 year extension to my lease. Similar residencies in Mitcheldean with a long lease were worth £285,000. The mid-range amount of ground rent was £55 billed yearly. The lease terminated in 2105. Having 79 years remaining we estimated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 exclusive of costs.