Unfortunately that a Mottingham residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Mottingham property prices.Once your lease nears 85ish years, you should start thinking about a lease extension. If lease term drops below 80 years, you will then be required to pay 50% of the property's 'marriage value' on top of 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 Most leasehold owners in Mottingham will be able to extend under the legislation; however a conveyancer should be able to clarify if you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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 |
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.
Half a year ago Liam, started to get near to the 80-year mark with the lease on his leasehold apartment in Mottingham. In buying his flat 19 years ago, the lease term was of minimal relevance. Fortunately, he noticed he would imminently be paying an inflated amount for Extending the lease. Liam extended the lease at the eleventh hour last March. Liam and the freeholder ultimately settled on an amount of £5,500 . If he had missed the deadline, the amount would have escalated by at least £1,075.
In 2010 we were phoned by Ms M Gray who, having moved into a one bedroom apartment in Mottingham in February 2000. The dilemma was if we could estimate the price could be to extend the lease by an additional years. Similar homes in Mottingham with a long lease were worth £225,800. The average amount of ground rent was £60 billed every twelve months. The lease finished in 2086. Given that there were 60 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £23,800 and £27,400 not including legals.
An example of a Lease Extension decision 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 related to 1 flat. The unexpired lease term was 23.26 years.