Meliden leases on domestic deteriorating in value. Where your lease has approximately ninety years unexpired, you should start thinking about a lease extension. It is important to recognise that it is that it is financially advisable for the lease extension to take place before the term of the existing lease dips lower than eighty years - otherwise a higher amount will be due. Flat owners in Meliden will mostly be legally entitled to a lease extension; however It would be wise to check with a conveyancing solicitor to check your eligibility. In some situations you may not be entitled. There are also strict deadlines and steps to comply with once the process has started so it’s prudent to be guided by a conveyancing solicitor during the process.
It is generally accepted that a property with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years remaining, the premises will be equivalent in value to a freehold for many years ahead.
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with handle Meliden 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 conveyancing solicitor we work with provide it.
Adam owned a 2 bedroom apartment in Meliden on the market with a lease of just over 59 years unexpired. Adam on an informal basis contacted his freeholder being a well known London-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Adam to invoke his statutory right. Adam procured expert advice and secured satisfactory deal informally and ending up with a market value flat.
Dr H Campbell completed a first floor flat in Meliden in July 2011. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by an additional years. Identical properties in Meliden with 100 year plus lease were in the region of £200,000. The mid-range amount of ground rent was £50 collected per annum. The lease terminated in 2102. Taking into account 77 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 not including expenses.
In 2011 we were e-mailed by Dr Tyler Kelly who, having was assigned a lease of a garden flat in Meliden in February 2011. We are asked if we could estimate the premium would be to prolong the lease by a further 90 years. Comparable homes in Meliden with a long lease were valued about £265,200. The average ground rent payable was £65 billed every twelve months. The lease finished in 2091. Having 66 years remaining we calculated the premium to the freeholder to extend the lease to be within £15,200 and £17,600 not including expenses.