The re-sale value of a leasehold property in New Malden depends on how many years the lease has left to run. If it is close to or less than eighty years you should envisage difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of buying. It is ideal to start the process of extending the lease is when the lease still has 82 years remaining so that all matters can be addressed ahead of the 80 year mark. Current legislation enables New Malden qualifying lessees to acquire a lease extension of 90 years on top of the remaining lease term at a peppercorn rent (that is, rent free). The intention of the valuation is to determine the sum payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in New Malden with in excess of 100 years remaining 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 upside in buying the reversionary interest unless savings on ground rent and service charges justify it.
|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.|
|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.
|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 lawyers that we work with undertake New Malden 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 lawyer we work with provide it.
John was the the leasehold owner of a 2 bedroom apartment in New Malden being sold with a lease of fraction over sixty years left. John informally spoke with his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £50 yearly. Ordinarily, ground rent would not be payable on a lease extension were John to exercise his statutory right. John procured expert advice and secured an acceptable resolution informally and ending up with a market value flat.
Mrs O Ricardo acquired a recently refurbished flat in New Malden in July 1998. We are asked if we could estimate the price would likely be for a ninety year extension to my lease. Comparable residencies in New Malden with an extended lease were worth £275,000. The mid-range ground rent payable was £55 collected yearly. The lease expired on 14 May 2097. Having 76 years left we calculated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of costs.
An example of a Lease Extension case for a New Malden premises is Flat D 15 Claremont Gardens in September 2013. TheTribunal determined in accordance with section48 and Schedule13 of the Leasehold Reform,Housing and Urban Development Act 1993 that the premium for the extended lease should be fourteen thousand one hundred and eighty seven pounds (£14,187.00) This case was in relation to 1 flat.