Mortimer leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Most owners of residential leasehold property in Mortimer enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Mortimer you would be well advised to check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Mortimer with over one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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:
|
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Mortimer,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Mortimer valuers.
Harrison owned a studio apartment in Mortimer being sold with a lease of just over 59 years left. Harrison informally contacted his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £200 yearly. Ordinarily, ground rent would not be due on a lease extension were Harrison to invoke his statutory right. Harrison obtained expert legal guidance and secured satisfactory resolution without going to tribunal and readily saleable.
Last month we were contacted by Mrs D Petit , who acquired a purpose-built apartment in Mortimer in April 2005. The question was if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year extension to my lease. Comparable residencies in Mortimer with an extended lease were valued around £208,600. The average amount of ground rent was £60 collected every twelve months. The lease lapsed on 23 October 2083. Having 57 years unexpired we estimated the premium to the landlord to extend the lease to be within £30,400 and £35,200 plus professional charges.
In 2011 we were contacted by Mr and Mrs. I Moreau who, having bought a basement flat in Mortimer in March 2004. The question was if we could shed any light on how much (approximately) premium would be to prolong the lease by 90 years. Comparable flats in Mortimer with 100 year plus lease were valued around £200,000. The average ground rent payable was £50 billed monthly. The lease finished on 8 October 2103. Given that there were 77 years outstanding we approximated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 not including professional charges.