It’s a harsh truth that a Lydiate and Melling residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Lydiate and Melling property market.Once your lease gets to 85ish years, you need to start considering a lease extension. If lease term drops below 80 years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Lydiate and Melling will be able to extend under the legislation; however a lawyer should be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
Leasehold premises in Lydiate and Melling with more than 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 home. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you better control over the value of your Lydiate and Melling leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Luke was the the leasehold owner of a studio flat in Lydiate and Melling being marketed with a lease of just over 61 years unexpired. Luke informally spoke with his freeholder a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Luke to exercise his statutory right. Luke obtained expert advice and was able to make an informed judgement and deal with the matter and readily saleable.
In 2010 we were contacted by Mr and Mrs. D Watson who, having completed a one bedroom flat in Lydiate and Melling in April 2012. The dilemma was if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Comparative properties in Lydiate and Melling with a long lease were in the region of £176,200. The mid-range ground rent payable was £65 collected annually. The lease finished in 2081. Considering the 56 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £29,500 and £34,000 not including professional charges.
Last year we were contacted by Dr Jennifer Lambert , who owned a purpose-built flat in Lydiate and Melling in July 1995. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by ninety years. Identical flats in Lydiate and Melling with an extended lease were valued around £237,600. The mid-range amount of ground rent was £45 invoiced per annum. The lease ended in 2092. Taking into account 67 years remaining we estimated the compensation to the landlord to extend the lease to be between £11,400 and £13,200 exclusive of costs.