The re-sale value of a leasehold property in Mottingham depends on how long the lease has remaining. If it is close to or fewer than 80 years you should expect difficulties on re-sale, so it is recommended to arrange for the lease to be extended ahead of buying. It is ideal to start the lease extension process when a lease still has 82 years remaining so that a lease extension can be concluded prior to the 80 year cut off point. Leasehold Reform legislation enables Mottingham qualifying lessees to acquire a new lease which will be for the balance of the existing lease plus a further term of ninety years. The intention of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally considered that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea 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. |
| 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. |
Engaging our service gives you enhanced control over the value of your Mottingham leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
After unsuccessful discussions with the landlord of her studio flat in Mottingham, Naomi started the lease extension process just as her lease was approaching the crucial 80-year mark. The lease extension was finalised in September 2014. The landlord’s charges were negotiated to a tad over 450 pounds.
Last year we were phoned by Mr and Mrs. P Johnson , who took over the lease of a one bedroom apartment in Mottingham in June 2010. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year lease extension. Similar flats in Mottingham with a long lease were valued around £295,000. The mid-range amount of ground rent was £50 collected quarterly. The lease ended on 3 October 2100. Taking into account 75 years left we approximated the premium to the landlord to extend the lease to be within £8,600 and £9,800 plus professional charges.
An example of a Lease Extension decision for a Mottingham residence is 49 Woodstock Court Burnt Ash Hill in May 2012. the payment of £64,116 by the leaseholder was the premium which the Tribunal found due for the lease extension in this case. This case was in relation to 1 flat. The remaining number of years on the lease was 23.26 years.