Meliden leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Meliden tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Meliden you must investigate if your lease has between seventy and ninety years left. There are compelling reasons why a Meliden leaseholder with a lease having around 80 years unexpired should take action to ensure that a lease extension is actioned without delay
It is conventional wisdom that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers 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 conveyancer we work with provide it.
Two years ago Eli, started to get close to the eighty-year mark with the lease on his basement apartment in Meliden. Having purchased his property 18 years previously, the lease term was of no bearing. Luckily, he became aware that he would soon be paying an inflated amount for a lease extension. Eli extended the lease just under the wire last March. Eli and the landlord who owned the flat above in the end settled on a premium of £5,000 . If the lease had slipped below 80 years, the premium would have escalated by a minimum £1,125.
Mr and Mrs. J Wright moved into a basement flat in Meliden in June 2002. We are asked if we could estimate the premium would be for a 90 year lease extension. Comparable residencies in Meliden with a long lease were worth £285,000. The average amount of ground rent was £45 invoiced quarterly. The lease expiry date was on 6 January 2097. Given that there were 71 years outstanding we calculated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 plus fees.
Dr Liam Thomas moved into a garden apartment in Meliden in March 1995. The question was if we could approximate the price would likely be for a 90 year extension to my lease. Comparable homes in Meliden with a long lease were in the region of £230,800. The mid-range amount of ground rent was £60 billed every twelve months. The lease expired on 27 April 2086. Given that there were 60 years remaining we approximated the compensation to the landlord to extend the lease to be within £24,700 and £28,600 not including professional charges.