With a residential leasehold property in Melbourne, you are actually purchasing a right to live in a property for a prescribed time frame. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you should consider a lease extension sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease becomes disproportionately more expensive especially once there are less than 80 years remaining. Leasehold owners in Melbourne with a lease drawing near to 81 years unexpired should seriously consider extending it without delay. When the lease term has under eighty years outstanding, under the current Act the landlord can calculate and demand a larger amount, based on a technical multiplication, known as “marriage value” which is due.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 35 years unexpired, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Lease extensions in Melbourne can be a difficult process. We recommend you secure professional help from a conveyancing solicitor and valuer with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Melbourne lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Connor owned a 2 bedroom flat in Melbourne on the market with a lease of just over sixty years left. Connor on an informal basis contacted his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £50 annually. No ground rent would be payable on a lease extension were Connor to invoke his statutory right. Connor procured expert advice and secured satisfactory deal without resorting to tribunal and ending up with a market value flat.
Last February we were phoned by Mrs Rachael Wood , who purchased a recently refurbished flat in Melbourne in November 2001. The dilemma was if we could shed any light on how much (roughly) price would likely be to prolong the lease by an additional years. Comparative residencies in Melbourne with 100 year plus lease were worth £267,600. The mid-range ground rent payable was £65 invoiced quarterly. The lease concluded in 2092. Taking into account 67 years outstanding we approximated the premium to the landlord for the lease extension to be between £14,300 and £16,400 not including legals.
Last November we were phoned by Mr and Mrs. L David , who purchased a basement apartment in Melbourne in November 1995. The dilemma was if we could estimate the price would be for a 90 year lease extension. Identical premises in Melbourne with an extended lease were in the region of £206,200. The average amount of ground rent was £60 invoiced annually. The lease ran out in 2081. Having 56 years outstanding we calculated the premium to the freeholder for the lease extension to be between £32,300 and £37,400 not including legals.