It’s an underpublicised certainty that a Mottingham residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Mottingham property market.Where your lease has approximately ninety years left, you should start considering a lease extension. If lease term drops under 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 additional value that a lease extension will add the property The majority of leasehold owners in Mottingham will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your lawyer throughout the process.
Leasehold properties in Mottingham with in excess of 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
Regardless of whether you are a tenant or a freeholder in Mottingham,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Mottingham valuers.
Last Winter Connor, came seriously near to the 80-year threshold with the lease on his first floor apartment in Mottingham. Having purchased his flat twenty years previously, the length of the lease was of minimal interest. As luck would have it, he became aware that he would imminently be paying way over the odds for Extending the lease. Connor arranged for a lease extension just in the nick of time last March. Connor and the landlord eventually agreed on sum of £5,500 . If the lease had dipped lower than eighty years, the sum would have gone up by at least £900.
Last month we were approach by Dr C Ward , who completed a garden apartment in Mottingham in May 2004. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by a further 90 years. Identical properties in Mottingham with an extended lease were worth £300,000. The average ground rent payable was £50 invoiced monthly. The lease expiry date was in 2102. Taking into account 76 years as a residual term we approximated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 not including professional charges.
An example of a Lease Extension matter before the tribunal for a Mottingham property 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 affected 1 flat. The number of years remaining on the existing lease(s) was 23.26 years.