Mulbarton leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Mulbarton residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Mulbarton you really ought to check if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under 80 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 residencies in Mulbarton with over one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges merit 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 procure Mulbarton 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.
Hunter owned a 2 bedroom apartment in Mulbarton on the market with a lease of fraction over 72 years unexpired. Hunter on an informal basis contacted his landlord being a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Hunter to invoke his statutory right. Hunter obtained expert advice and secured satisfactory resolution without resorting to tribunal and sell the property.
Last Winter we were called by Mr and Mrs. T King , who moved into a garden apartment in Mulbarton in September 1999. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Identical homes in Mulbarton with a long lease were valued about £246,800. The average ground rent payable was £60 invoiced yearly. The lease came to a finish on 26 March 2075. Given that there were 50 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £44,700 and £51,600 not including professional charges.
Last month we were called by Mr U David , who completed a purpose-built flat in Mulbarton in January 2007. The dilemma was if we could shed any light on how much (roughly) premium would be for a ninety year lease extension. Similar homes in Mulbarton with a long lease were in the region of £203,200. The average ground rent payable was £65 invoiced monthly. The lease came to a finish on 12 September 2086. Considering the 61 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £19,000 and £22,000 not including costs.