When it comes to residential leasehold premises in Merton Park, you are actually purchasing a right to live in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you may think about a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive particularly once there are less than 80 years remaining. Residents in Merton Park with a lease approaching 81 years unexpired should seriously consider extending it sooner than later. Once the lease term has under 80 years remaining, under the current Act the landlord can calculate and demand a greater amount, based on a technical computation, strangely termed as “marriage value” which is payable.
It is generally accepted that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 30 years left, the residence will be equivalent in value to a freehold for decades to come.
| 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. |
| Coventry Building Society | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 conveyancing solicitors that we work with handle Merton Park 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.
Milo was the the leasehold proprietor of a 2 bedroom apartment in Merton Park on the market with a lease of just over sixty years left. Milo informally contacted his freeholder a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Milo to exercise his statutory right. Milo obtained expert advice and was able to make a more informed judgement and handle with the matter and sell the property.
Dr D Bernard moved into a basement flat in Merton Park in February 2003. We are asked if we could shed any light on how much (roughly) price would be for a ninety year lease extension. Identical homes in Merton Park with an extended lease were in the region of £225,800. The average ground rent payable was £60 collected per annum. The lease elapsed on 22 November 2086. Given that there were 60 years left we calculated the compensation to the landlord to extend the lease to be within £24,700 and £28,600 not including costs.
An example of a Lease Extension matter before the tribunal for a Merton Park flat 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 was in relation to 1 flat. The unexpired lease term was 62.94 years.