Murton 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. Legislation has been in place for sometime now allowing qualifying Murton residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Murton you really ought to see if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Murton with more than one hundred years outstanding 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 circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with procure Murton 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.
Trailing unsuccessful correspondence with the freeholder of her first floor apartment in Murton, Jessica commenced the lease extension process as the 80 year mark was swiftly advancing. The transaction completed in June 2008. The freeholder’s fees were kept to an absolute minimum.
In 2009 we were called by Ms Caitlin Rogers who, having purchased a one bedroom flat in Murton in June 2008. We are asked if we could approximate the compensation to the landlord could be to extend the lease by an additional years. Identical residencies in Murton with 100 year plus lease were worth £250,400. The average amount of ground rent was £65 collected yearly. The lease ran out in 2089. Given that there were 64 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £19,000 and £22,000 exclusive of legals.
Mr and Mrs. P Cooper purchased a one bedroom apartment in Murton in August 2002. The dilemma was if we could estimate the compensation to the landlord would likely be to prolong the lease by ninety years. Identical premises in Murton with an extended lease were worth £184,000. The average ground rent payable was £55 collected per annum. The lease came to a finish on 20 January 2078. Having 53 years outstanding we calculated the premium to the freeholder to extend the lease to be within £28,500 and £33,000 plus legals.