The market value of a leasehold property in Merton Park is impacted by how long the lease has remaining. If it is near to or fewer than eighty years you should anticipate difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of buying. It is preferable to commence the lease extension process when a lease still has 82 years unexpired so that all matters can be finalised ahead of the eighty year cut off point. Current legislation enables Merton Park qualifying lessees to a 90 year extension added to their unexpired lease term (ie if your lease has 50 years left the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold residencies in Merton Park with over 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Merton Park,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Merton Park valuers.
Owen was the the leasehold owner of a 2 bedroom flat in Merton Park being sold with a lease of fraction over fifty eight years unexpired. Owen informally approached his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £200 annually. No ground rent would be payable on a lease extension were Owen to exercise his statutory right. Owen obtained expert advice and was able to make an informed decision and deal with the matter and readily saleable.
Last year we were approach by Mrs Lucy Hall , who took over the lease of a first floor flat in Merton Park in May 1999. We are asked if we could estimate the premium would be for a ninety year lease extension. Similar flats in Merton Park with 100 year plus lease were worth £300,000. The mid-range amount of ground rent was £50 billed every twelve months. The lease expired in 2102. Considering the 76 years unexpired we approximated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 not including fees.
An example of a Lease Extension decision for a Merton Park premises is 14 Nutwell Street in January 2014. The premium payable for the acquisition of a new lease of the subject premises was in the sum of £30,523 This case affected 1 flat. The number of years remaining on the existing lease(s) was 62.94 years.