With a domestic leasehold property in Mitcham, you are actually buying a right to live in a property for a prescribed time frame. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly particularly once there are less than eighty years remaining. Anyone in Mitcham with a lease drawing near to 81 years unexpired should seriously think of extending it sooner rather than later. Once the lease term has under 80 years remaining, under the relevant Act the freeholder is entitled to calculate and charge a larger premium, assessed on a technical multiplication, known as “marriage value” which is payable.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date 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 |
Using our service will provide you enhanced control over the value of your Mitcham leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Jude, came perilously near to the eighty-year threshold with the lease on his garden flat in Mitcham. In buying his property two decades ago, the lease term was of no significance. Luckily, it dawned on him that he would imminently be paying an escalated premium for a lease extension. Jude was able to extend his lease at the eleventh hour in July. Jude and the freeholder ultimately settled on a premium of £5,000 . If he had missed the deadline, the sum would have increased by a minimum £1,050.
Mr F Bertrand completed a studio apartment in Mitcham in May 2002. The dilemma was if we could estimate the price would be for a ninety year lease extension. Comparative premises in Mitcham with 100 year plus lease were worth £240,600. The mid-range ground rent payable was £60 invoiced every twelve months. The lease ran out in 2088. Given that there were 62 years remaining we calculated the premium to the freeholder for the lease extension to be between £21,900 and £25,200 not including expenses.
An example of a Freehold Enfranchisement decision for a Mitcham premises is 50 & 52 Southcroft Road in September 2013. The tribunals own valuation determined that the premium payable should be £29,000 This case affected 2 flats. The number of years remaining on the existing lease(s) was 86.11 and 60.64.