There is no doubt about it a leasehold property in Melbourne is a wasting asset as a result of the diminishing lease term. Where the lease has, beyond 125 years remaining then this decrease may be negligible nevertheless there will become a stage when a lease has fewer than eighty years unexpired as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary logic behind why you should consider extending sooner rather than later. Many flat owners in Melbourne will meet the qualifying criteria; however a conveyancing solicitor will be able to advise if you are eligible to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
Leasehold premises in Melbourne with over 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| Halifax | 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 |
Regardless of whether you are a tenant or a freeholder in Melbourne,the lease extension experts 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 Melbourne valuers.
Two years ago Aarav, came precariously close to the 80-year threshold with the lease on his purpose- built apartment in Melbourne. In buying his property two decades ago, the length of the lease was of minimal concern. Luckily, he became aware that he would soon be paying an inflated amount for Extending the lease. Aarav arranged for a lease extension just ahead of time in August. Aarav and the landlord who owned the flat above subsequently settled on sum of £6,000 . If he had missed the deadline, the sum would have increased by at least £900.
In 2012 we were contacted by Mr and Mrs. B Vincent who, having bought a ground floor flat in Melbourne in September 2007. The question was if we could estimate the compensation to the landlord would likely be to extend the lease by an additional years. Comparative properties in Melbourne with 100 year plus lease were worth £200,000. The mid-range amount of ground rent was £50 invoiced quarterly. The lease concluded in 2103. Taking into account 77 years outstanding we approximated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 plus fees.
Last Winter we were approach by Mrs E Davis , who owned a garden apartment in Melbourne in March 2001. We are asked if we could estimate the premium could be for a 90 year extension to my lease. Similar premises in Melbourne with a long lease were worth £265,200. The average amount of ground rent was £65 billed yearly. The lease expired in 2092. Given that there were 66 years remaining we estimated the compensation to the landlord to extend the lease to be within £15,200 and £17,600 exclusive of fees.