With a long leasehold premises in Montpelier, you are actually buying a right to live in a property for a prescribed time frame. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may consider a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly especially when there are fewer than 80 years left. Leasehold owners in Montpelier with a lease nearing 81 years left should seriously consider extending it as soon as possible. When a lease has less than eighty years outstanding, under the relevant statute the landlord is entitled to calculate and demand a larger premium, based on a technical calculation, known as “marriage value” which is due.
Leasehold residencies in Montpelier with more than one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Montpelier,the lease extension lawyers 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 Montpelier valuers.
Last Spring Finn, came perilously near to the 80-year mark with the lease on his one bedroom flat in Montpelier. Having purchased his property two decades ago, the lease term was of little bearing. by good luck, he recognised he would imminently be paying an inflated amount for Extending the lease. Finn was able to extend his lease at the eleventh hour last August. Finn and the landlord who owned the flat above ultimately agreed on an amount of £5,000 . If the lease had fallen below 80 years, the sum would have increased by a minimum £1,125.
Last Spring we were approach by Ms Ellie González , who took over the lease of a first floor flat in Montpelier in February 2004. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year extension to my lease. Similar residencies in Montpelier with an extended lease were worth £191,400. The mid-range ground rent payable was £55 invoiced annually. The lease ended in 2079. Given that there were 54 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £34,200 and £39,600 exclusive of costs.
In 2012 we were approached by Mr P Scott who, having took over the lease of a first floor flat in Montpelier in May 2006. We are asked if we could estimate the premium could be to prolong the lease by a further 90 years. Similar properties in Montpelier with a long lease were worth £295,000. The average ground rent payable was £45 invoiced annually. The lease lapsed on 15 August 2099. Taking into account 74 years outstanding we estimated the premium to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of professional charges.