Owning a flat usually means owning a lease of the property, which has a finite term of years. your lease will usually be granted for a fixed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Mudeford. Inevitably, the term of lease remaining shortens as time goes by. This is often ignored and only becomes a problem when the flat or house needs to be sold or refinanced. The shorter the lease the lower the value of the property and the more expensive it will be to procure a lease extension. Eligible leaseholders in Mudeford have the right to extend the lease for a further ninety years in accordance with legislation. You should give careful deliberation before putting off your Mudeford lease extension. Putting off that expense now likely increases the price you will ultimately incur to extend your lease
Leasehold properties in Mudeford with more than 100 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 home. In such circumstances there is often little upside in buying the reversionary interest 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. |
| 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; |
| 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. |
| 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. |
| Yorkshire 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. |
The lawyers that we work with handle Mudeford lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Following unsuccessful discussions with the freeholder of her leasehold apartment in Mudeford, Holly commenced the lease extension process just as her lease was coming close to the crucial eighty-year deadline. The legal work completed in June 2010. The landlord’s fees were restricted to about 600 GBP.
Ms Isobel Martínez was assigned a lease of a one bedroom flat in Mudeford in January 2007. The dilemma was if we could estimate the price would likely be for a 90 year lease extension. Comparative properties in Mudeford with an extended lease were worth £280,000. The mid-range amount of ground rent was £55 billed yearly. The lease lapsed on 11 October 2104. Having 78 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 not including legals.
Last Christmas we were e-mailed by Dr Kate Harris , who bought a garden apartment in Mudeford in October 1996. The question was if we could estimate the compensation to the landlord could be to prolong the lease by ninety years. Comparative premises in Mudeford with 100 year plus lease were in the region of £191,000. The mid-range amount of ground rent was £65 billed yearly. The lease elapsed in 2084. Given that there were 58 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £23,800 and £27,400 plus costs.