It’s an underpublicised truth that a Mill Hill residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Mill Hill property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If lease term falls below 80 years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Mill Hill will be able to extend under the legislation; however a lawyer should be able to clarify if you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
It is generally considered that a residential leasehold with in excess of 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Lease extensions in Mill Hill can be a difficult process. We recommend you procure guidance from a lawyer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Mill Hill lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Off the back of protracted discussions with the freeholder of her leasehold flat in Mill Hill, Millie commenced the lease extension process just as the lease was coming close to the all-important 80-year mark. The transaction completed in January 2013. The landlord’s fees were negotiated to less than 500 pounds.
Last April we were contacted by Mr and Mrs. M Roux , who owned a first floor apartment in Mill Hill in April 2009. The dilemma was if we could shed any light on how much (approximately) price would be for a 90 year lease extension. Similar properties in Mill Hill with a long lease were in the region of £200,000. The average ground rent payable was £50 invoiced per annum. The lease came to a finish in 2102. Having 77 years remaining we estimated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of costs.
An example of a Lease Extension matter before the tribunal for a Mill Hill flat is Ground Floor Maisonette 17 Milton Road in January 2014. The Tribunal determined the premium payable by the Applicant to the should be £13,299 This case was in relation to 1 flat. The unexpired residue of the current lease was 71.73 years.