Morden leases on residential deteriorating in value. if your lease has approximately 90 years remaining, you should start thinking about a lease extension. If lease term is less than eighty years, you will then have to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Flat owners in Morden will mostly qualify for a lease extension; however a solicitor should be able check your eligibility. In certain circumstances you may not be entitled. There are also strict deadlines and formalities to comply with once the process has started so it’s best to be guided by a lawyer during the process.
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Godiva Mortgages | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Using our service gives you enhanced control over the value of your Morden leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Luca, started to get near to the 80-year threshold with the lease on his two bedroom apartment in Morden. Having purchased his property two decades ago, the length of the lease was of little relevance. Thankfully, he realised he would imminently be paying an inflated amount for a lease extension. Luca was able to extend his lease just in the nick of time in June. Luca and the freeholder in the end settled on an amount of £5,000 . If the lease had slipped to less than eighty years, the sum would have become more exhorbitant by at least £975.
Last Autumn we were phoned by Dr Kelsey Flores , who acquired a first floor apartment in Morden in March 2000. The question was if we could estimate the price could be for a 90 year extension to my lease. Similar residencies in Morden with a long lease were in the region of £243,000. The average amount of ground rent was £65 billed monthly. The lease ended on 27 June 2089. Given that there were 63 years outstanding we estimated the premium to the freeholder to extend the lease to be within £20,000 and £23,000 not including professional charges.
An example of a Lease Extension case for a Morden residence 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 was in relation to 1 flat. The unexpired term as at the valuation date was 62.94 years.