Unfortunately that a Melbourn residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Melbourn 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 amount will be payable. Most flat owners in Melbourn will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer for the duration of the formalities.
It is conventional wisdom that a property with over 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 Melbourn,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Melbourn valuers.
In the wake of eight months of lengthy negotiations with the freeholder of her leasehold flat in Melbourn, Harriet started the lease extension process as the 80 year mark was swiftly nearing. The legal work completed in August 2010. The freeholder’s costs were kept to an absolute minimum.
Mr and Mrs. O White purchased a one bedroom flat in Melbourn in February 2010. We are asked if we could estimate the premium could be for a 90 year extension to my lease. Similar properties in Melbourn with 100 year plus lease were worth £285,000. The average ground rent payable was £55 invoiced per annum. The lease end date was on 25 August 2105. Given that there were 79 years unexpired we estimated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 exclusive of legals.
Last November we were contacted by Dr B Girard , who completed a one bedroom apartment in Melbourn in July 2011. The dilemma was if we could shed any light on how much (approximately) premium would be to extend the lease by an additional years. Identical residencies in Melbourn with 100 year plus lease were worth £193,400. The mid-range amount of ground rent was £65 collected monthly. The lease termination date was in 2085. Considering the 59 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £21,900 and £25,200 not including professional charges.