With a residential leasehold premises in Mortimer, you are actually buying a right to live in a property for a prescribed time frame. In recent years flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you may think about a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease becomes disproportionately more expensive especially once there are fewer than eighty years left. Residents in Mortimer with a lease approaching 81 years unexpired should seriously consider extending it sooner than later. When the lease term has less than eighty years remaining, under the current legislation the freeholder is entitled to calculate and levy a greater amount, based on a technical multiplication, strangely termed as “marriage value” which is payable.
It is generally accepted that a residential leasehold with more than one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| 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. |
| 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. |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Using our service will provide you better control over the value of your Mortimer leasehold, as your property will be more valuable and marketable in relation to the 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.
Gabriel owned a 2 bedroom flat in Mortimer being marketed with a lease of fraction over fifty eight years remaining. Gabriel on an informal basis spoke with his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £100 per annum. Ordinarily, ground rent would not be payable on a lease extension were Gabriel to invoke his statutory right. Gabriel procured expert advice and was able to make an informed decision and handle with the matter and sell the flat.
In 2010 we were approached by Dr B Kelly who, having was assigned a lease of a purpose-built flat in Mortimer in November 2001. We are asked if we could estimate the compensation to the landlord could be to extend the lease by ninety years. Similar flats in Mortimer with 100 year plus lease were valued about £280,000. The mid-range ground rent payable was £45 billed monthly. The lease end date was on 18 November 2097. Considering the 71 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 not including expenses.
In 2009 we were called by Mr and Mrs. S Roux who, having owned a garden flat in Mortimer in January 2012. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year lease extension. Identical premises in Mortimer with 100 year plus lease were valued around £225,800. The mid-range ground rent payable was £60 collected annually. The lease came to a finish on 9 May 2086. Given that there were 60 years remaining we calculated the premium to the freeholder for the lease extension to be within £25,700 and £29,600 exclusive of costs.