Unfortunately that a Milton Keynes residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Milton Keynes property prices.Where your lease has approximately 90 years left, you should start considering a lease extension. If the number of years remaining drops under eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of flat owners in Milton Keynes will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
Leasehold premises in Milton Keynes with over 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Milton Keynes,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Milton Keynes valuers.
Last year Benjamin, came seriously near to the 80-year threshold with the lease on his leasehold flat in Milton Keynes. Having purchased his home 18 years previously, the unexpired term was of no interest. Luckily, he realised he would imminently be paying an escalated premium for a lease extension. Benjamin was able to extend his lease just ahead of time in January. Benjamin and the landlord ultimately settled on an amount of £5,500 . If the lease had slipped below eighty years, the figure would have escalated by at least £1,025.
In 2013 we were approached by Mr Sam Peterson who, having was assigned a lease of a one bedroom flat in Milton Keynes in July 1996. The question was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Comparative premises in Milton Keynes with an extended lease were valued about £243,000. The average amount of ground rent was £65 invoiced monthly. The lease terminated on 26 July 2088. Having 63 years left we calculated the premium to the landlord to extend the lease to be between £20,000 and £23,000 plus legals.
In 2009 we were contacted by Mr D Ward who, having bought a one bedroom apartment in Milton Keynes in February 2005. We are asked if we could shed any light on how much (roughly) premium would be to prolong the lease by an additional years. Comparative properties in Milton Keynes with an extended lease were worth £181,600. The mid-range amount of ground rent was £55 billed monthly. The lease finished on 12 March 2077. Considering the 52 years left we calculated the premium to the freeholder for the lease extension to be within £30,400 and £35,200 not including professional charges.