It’s a harsh truth that a Mudeford residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Mudeford property market.Once your lease nears 85ish years, you need to start thinking about a lease extension. If lease term slips under eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of flat owners in Mudeford will be able to extend under the legislation; however a conveyancer will be able to clarify whether you qualify for an extension. In some situations you may not be entitled. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 conveyancers that we work with undertake 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 conveyancer we work with provide it.
In the wake of 9 months of lengthy negotiations with the freeholder of her studio apartment in Mudeford, Isabella commenced the lease extension process as the 80 year mark was swiftly nearing. The lease extension was finalised in February 2012. The landlord’s costs were kept to an absolute minimum.
Last Spring we were e-mailed by Mr and Mrs. B Garcia , who took over the lease of a one bedroom apartment in Mudeford in February 2000. We are asked if we could approximate the premium would likely be to prolong the lease by ninety years. Similar residencies in Mudeford with 100 year plus lease were in the region of £191,000. The mid-range ground rent payable was £65 invoiced per annum. The lease ended on 20 June 2084. Considering the 58 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £23,800 and £27,400 plus professional charges.
In 2013 we were approached by Dr Jude Moreau who, having bought a basement apartment in Mudeford in May 2006. We are asked if we could approximate the price would be for a ninety year lease extension. Similar residencies in Mudeford with an extended lease were valued around £250,000. The average ground rent payable was £50 invoiced every twelve months. The lease concluded in 2095. Taking into account 69 years unexpired we approximated the premium to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of fees.