The nearer a residential lease in Merton Park nears to zero years unexpired, the more it reduces the value of the property. If the lease has, beyond one hundred years to run then this decrease may be negligible however there will become a point in time when a lease has fewer than 80 years left as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the main reason why you should consider extending sooner than later. Most flat owners in Merton Park will meet the qualifying criteria; however a lawyer should be able to confirm whether you are eligible for a lease extension. In certain situations you may not qualify, the most common reason being that you have owned the property for less than two years.
Leasehold residencies in Merton Park with over one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
The conveyancing solicitors that we work with undertake 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.
Jonathan owned a 2 bedroom apartment in Merton Park being sold with a lease of a little over fifty eight years unexpired. Jonathan informally approached his landlord a well known Manchester-based freehold company for a lease extension. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Jonathan to exercise his statutory right. Jonathan procured expert advice and secured an acceptable resolution without going to tribunal and ending up with a market value flat.
In 2009 we were approached by Mrs O Morgan who, having owned a one bedroom flat in Merton Park in March 2007. We are asked if we could approximate the price would likely be to extend the lease by a further 90 years. Identical properties in Merton Park with a long lease were in the region of £285,000. The average amount of ground rent was £45 collected monthly. The lease finished in 2097. Having 72 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 plus professional charges.
An example of a Lease Extension decision for a Merton Park property 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 unexpired residue of the current lease was 62.94 years.