Murton leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Murton residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Murton you must investigate if your lease has between seventy and 90 years left. There are good reasons why a Murton leaseholder with a lease having around eighty years left should take steps to make sure that a lease extension is actioned without delay
Leasehold residencies in Murton with more than one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance 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. |
| 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 | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers 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.
Twenty four months ago Ali, came dangerously close to the eighty-year threshold with the lease on his leasehold flat in Murton. In buying his flat 19 years ago, the unexpired term was of no bearing. Thankfully, he realised he needed to take steps soon on a lease extension. Ali arranged for a lease extension at the eleventh hour last May. Ali and the landlord who owned the flat above in the end agreed on the final figure of £5,000 . If the lease had gone below 80 years, the premium would have escalated by a minimum £900.
Last Winter we were e-mailed by Mr and Mrs. R Bernard , who owned a newly refurbished flat in Murton in June 2008. We are asked if we could shed any light on how much (roughly) price could be to extend the lease by 90 years. Identical flats in Murton with an extended lease were valued around £174,200. The mid-range ground rent payable was £55 billed quarterly. The lease lapsed on 23 August 2077. Considering the 51 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 plus costs.
Last Spring we were called by Dr U González , who took over the lease of a ground floor flat in Murton in November 2000. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year lease extension. Comparative residencies in Murton with 100 year plus lease were in the region of £285,000. The mid-range amount of ground rent was £45 collected every twelve months. The lease elapsed on 11 October 2097. Considering the 71 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 not including professional charges.