The re-sale value of a leasehold property in Mitcham is impacted by how long the lease has left to run. If it is close to or less than 80 years you should anticipate difficulties on re-sale, so it is recommended to arrange for the lease to be extended prior to purchasing. It is ideal to start the lease extension process when a lease still has 82 years remaining so that all matters can be finalised ahead of the 80 year mark. Current legislation enables Mitcham qualifying lessees to an additional term of ninety years in addition to the unexpired term, at a notional rent (zero ground rent). The reason of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a residential leasehold with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 Mitcham can be a difficult process. We recommend you procure guidance from a conveyancing solicitor and valuer 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 procuring Mitcham lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Subsequent to unsuccessful discussions with the landlord of her two bedroom apartment in Mitcham, Freya commenced the lease extension process just as her lease was nearing the all-important 80-year deadline. The transaction was concluded in October 2005. The freeholder’s costs were restricted to about 550 GBP.
Last October we were phoned by Dr Dylan Phillips , who took over the lease of a studio flat in Mitcham in May 1998. We are asked if we could approximate the price could be for a ninety year extension to my lease. Comparable flats in Mitcham with 100 year plus lease were worth £295,000. The average amount of ground rent was £50 invoiced yearly. The lease termination date was on 21 October 2100. Considering the 75 years remaining we estimated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of costs.
An example of a Freehold Enfranchisement matter before the tribunal for a Mitcham flat 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.