Melbourn leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Melbourn residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Melbourn you really ought to investigate if your lease has between 70 and 90 years left. There are good reasons why a Melbourn leaseholder with a lease having around eighty years remaining should take action to ensure that a lease extension is put in place without delay
Leasehold premises in Melbourn with more than one hundred years remaining 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 property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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 |
Using our service will provide you better control over the value of your Melbourn leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to unsuccessful discussions with the freeholder of her leasehold flat in Melbourn, Danielle commenced the lease extension process as the eighty year deadline was quickly nearing. The lease extension was finalised in January 2009. The freeholder’s costs were kept to an absolute minimum.
Mr Elijah Clark took over the lease of a first floor apartment in Melbourn in August 1996. The dilemma was if we could approximate the price could be to extend the lease by a further 90 years. Identical flats in Melbourn with 100 year plus lease were valued about £183,600. The average ground rent payable was £65 invoiced monthly. The lease ran out on 17 August 2082. Given that there were 57 years outstanding we approximated the premium to the landlord for the lease extension to be between £28,500 and £33,000 not including professional charges.
Ms P Ward moved into a one bedroom apartment in Melbourn in November 2011. We are asked if we could estimate the premium could be to extend the lease by 90 years. Similar properties in Melbourn with 100 year plus lease were in the region of £245,000. The average ground rent payable was £50 invoiced monthly. The lease expiry date was in 2093. Considering the 68 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus costs.