Meliden leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. The majority of owners of residential leasehold property in Meliden enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Meliden you should check if your lease has between seventy and 90 years left. There are compelling reasons why a Meliden flat owner with a lease having around eighty years left should take action to ensure that a lease extension is actioned without delay
Leasehold premises in Meliden with over 100 years outstanding 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 home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges justify 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Halifax | 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. |
| 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 undertake Meliden 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.
Finley owned a 2 bedroom apartment in Meliden being sold with a lease of a few days over sixty years unexpired. Finley informally contacted his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 annually. No ground rent would be due on a lease extension were Finley to invoke his statutory right. Finley obtained expert advice and was able to make an informed judgement and handle with the matter and sell the flat.
In 2012 we were phoned by Mr Theo Clarke who, having moved into a one bedroom apartment in Meliden in July 2006. The question was if we could approximate the price could be to prolong the lease by an additional years. Identical homes in Meliden with 100 year plus lease were valued around £174,200. The mid-range amount of ground rent was £55 invoiced per annum. The lease elapsed on 23 October 2077. Having 51 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 exclusive of professional charges.
Last Christmas we were called by Mr and Mrs. N Ali , who acquired a first floor apartment in Meliden in November 2004. We are asked if we could approximate the premium could be to extend the lease by 90 years. Identical properties in Meliden with a long lease were in the region of £285,000. The mid-range amount of ground rent was £45 billed monthly. The lease expired in 2097. Considering the 71 years left we estimated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 plus fees.