New Malden leases on residential deteriorating in value. Where your lease has approximately 90 years unexpired, you should start considering the need for a lease extension. If lease term falls under 80 years, you will then have to pay 50% of the property's 'marriage value' in addition to the standard cost of the lease extension to your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Flat owners in New Malden will mostly qualify for a lease extension; however a solicitor should be able check if you qualify. In some situations you may not qualify. There are prescribed timetables and formalities to follow once the process has commenced so it’s prudent to be guided by a lawyer during the process.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
The conveyancers that we work with procure New Malden lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
16 months ago Connor, started to get near to the eighty-year mark with the lease on his first floor apartment in New Malden. Having purchased his property two decades ago, the length of the lease was of minimal significance. by good luck, he realised he needed to take steps soon on Extending the lease. Connor arranged for a lease extension at the eleventh hour last January. Connor and the landlord who owned the flat above subsequently agreed on an amount of £6,000 . If he had missed the deadline, the amount would have escalated by a minimum £1,100.
Last Christmas we were approach by Dr Hollie Bernard , who bought a ground floor flat in New Malden in September 1997. The question was if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by 90 years. Identical homes in New Malden with an extended lease were worth £275,000. The mid-range amount of ground rent was £55 collected monthly. The lease expired in 2102. Having 77 years left we calculated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 plus fees.
An example of a Lease Extension decision for a New Malden residence is Flat D 15 Claremont Gardens in September 2013. TheTribunal determined in accordance with section48 and Schedule13 of the Leasehold Reform,Housing and Urban Development Act 1993 that the premium for the extended lease should be fourteen thousand one hundred and eighty seven pounds (£14,187.00) This case affected 1 flat.