The re-sale value of a leasehold property in Meliden is impacted by how long the lease has left to run. If it is near to or fewer than eighty years you should anticipate difficulties on re-sale, so it is advisable to arrange for a lease extension before purchasing. It is preferable to start the process of extending the lease is when the lease still has 82 years unexpired so that formalities can be finalised ahead of the 80 year cut off point. Statute enables Meliden qualifying lessees to acquire a new lease which will be for the balance of the existing lease plus a further term of 90 years. The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a property with over 100 years remaining is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the premises will be equivalent in value to a freehold for many years in the future.
Lender | Requirement |
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Bank of Scotland | Minimum 70 years from the date of the mortgage. |
Coventry Building Society | 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. |
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. |
Irrespective of whether you are a tenant or a landlord in Meliden,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Meliden valuers.
After protracted correspondence with the landlord of her leasehold flat in Meliden, Niamh commenced the lease extension process just as the lease was nearing the crucial eighty-year mark. The lease extension completed in January 2007. The landlord’s fees were restricted to a tad over 700 pounds.
In 2010 we were e-mailed by Mr and Mrs. L Bennett who, having bought a studio apartment in Meliden in July 2011. We are asked if we could approximate the price would likely be to extend the lease by an additional years. Comparable premises in Meliden with 100 year plus lease were in the region of £208,600. The mid-range amount of ground rent was £60 collected every twelve months. The lease finished in 2081. Given that there were 57 years outstanding we calculated the compensation to the landlord to extend the lease to be between £30,400 and £35,200 not including fees.
Ms H Harris owned a one bedroom flat in Meliden in March 1999. We are asked if we could approximate the price would be to prolong the lease by a further 90 years. Similar premises in Meliden with 100 year plus lease were valued about £200,000. The mid-range ground rent payable was £50 collected every twelve months. The lease expired on 17 October 2101. Having 77 years outstanding we estimated the premium to the landlord for the lease extension to be between £8,600 and £9,800 plus expenses.