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Top reasons for Melbourne lease extension


Top reasons for lease extension now:

Increase your lease and increase your Melbourne property value

Melbourne leases on domestic properties are gradually losing value. if your lease has approximately 90 years left, you should start thinking about a lease extension. An important point to note is that it is financially advisable for the lease extension to be in place before the term of the existing lease dips lower than eighty years - otherwise a higher premium will be payable. Flat owners in Melbourne will usually be legally entitled to a lease extension; however a solicitor should be able confirm your eligibility. In some cases you may not be entitled. There are also strict deadlines and formalities to comply with once the process is initiated so it’s best to be guided by a conveyancing solicitor during the process.

An extended lease has roughly the same value as a freehold

It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.

Lenders may decide not to issue a mortgage on a short lease

Almost all banks and building societies insist on a lengthy amount of time remaining on any leasehold property before they will consider it as adequate security. Even if you don't need a mortgage, you should be mindful that it is probable that someone wishing to buy your property in the future might well do, so where they are unable to obtain a mortgage, then the market price of the property could suffer. In the last decade most banks and building societies have increased the required minimum lease length that they are willing to grant a mortgage on

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;
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.
Godiva Mortgages A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion.
National Westminster Bank Mortgage term plus 30 years.
TSB Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.

Get in touch with one of our Melbourne lease extension solicitors or enfranchisement solicitors

Lease extensions in Melbourne can be a difficult process. We recommend you procure professional help from a lawyer and surveyor 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 Melbourne lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.

Melbourne Lease Extension Case Summaries:

Alicia, Melbourne, Derbyshire,

After unsuccessful negotiations with the landlord of her garden flat in Melbourne, Alicia started the lease extension process just as the lease was nearing the critical eighty-year threshold. The transaction was finalised in May 2014. The landlord’s costs were kept to an absolute minimum.

Melbourne case:

In 2013 we were phoned by Mr and Mrs. C Carter who, having moved into a ground floor apartment in Melbourne in November 2001. We are asked if we could estimate the price would be to extend the lease by 90 years. Similar premises in Melbourne with an extended lease were valued around £198,800. The average amount of ground rent was £55 collected quarterly. The lease terminated on 19 September 2079. Considering the 55 years left we estimated the compensation to the freeholder for the lease extension to be between £33,300 and £38,400 exclusive of professional charges.

Melbourne case:

Mrs Lydia Murphy purchased a one bedroom flat in Melbourne in July 2012. 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 premises in Melbourne with a long lease were in the region of £300,000. The average ground rent payable was £50 collected every twelve months. The lease elapsed on 23 February 2099. Having 75 years left we calculated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus fees.