Unfortunately that a Malton residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Malton property market.Where your lease has approximately 90 years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below eighty years - otherwise a higher premium will be due. Most leasehold owners in Malton will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the process.
Leasehold properties in Malton with over one hundred years remaining on the lease are sometimes regarded as a ‘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 upside in purchasing the reversionary interest unless savings on ground rent and estate 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. |
| Bank of Scotland | Minimum 70 years from the date 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. |
| 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 |
| 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. |
The conveyancing solicitors that we work with handle Malton 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.
Off the back of unsuccessful negotiations with the landlord of her first floor flat in Malton, Megan commenced the lease extension process as the 80 year threshold was rapidly coming. The transaction was concluded in May 2005. The landlord’s fees were restricted to a tad over 700 pounds.
Ms Katie Davis took over the lease of a one bedroom apartment in Malton in April 2001. We are asked if we could estimate the premium would be to extend the lease by a further 90 years. Identical properties in Malton with a long lease were worth £245,000. The mid-range amount of ground rent was £45 invoiced yearly. The lease elapsed on 13 January 2094. Taking into account 68 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including legals.
In 2010 we were e-mailed by Mr and Mrs. Y Bonnet who, having purchased a studio apartment in Malton in July 2003. The question was if we could shed any light on how much (roughly) premium would be to prolong the lease by ninety years. Identical homes in Malton with a long lease were in the region of £280,000. The mid-range amount of ground rent was £55 invoiced quarterly. The lease came to a finish in 2105. Given that there were 79 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 plus fees.