It’s a harsh truth that a Melksham residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Melksham property prices.Where your lease has approximately 90 years left, you should 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 under eighty years - otherwise a higher premium will be payable. The majority of flat owners in Melksham will be able to extend under the legislation; however a conveyancer should be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold properties in Melksham with more than one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the freehold 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; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Melksham can be a difficult process. We recommend you secure guidance from a lawyer and surveyor with experience in lease extensions.
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 dealing with Melksham lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Ryan owned a studio flat in Melksham on the market with a lease of just over 59 years remaining. Ryan informally approached his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £200 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Ryan to invoke his statutory right. Ryan obtained expert advice and secured satisfactory resolution informally and readily saleable.
Last Spring we were phoned by Ms Ellie Hernández , who moved into a ground floor flat in Melksham in March 2003. The question was if we could approximate the premium would be for a 90 year lease extension. Identical homes in Melksham with 100 year plus lease were in the region of £174,200. The average ground rent payable was £55 billed per annum. The lease end date was on 18 August 2077. Given that there were 51 years as a residual term we calculated the compensation to the landlord to extend the lease to be within £31,400 and £36,200 plus legals.
Mr and Mrs. D Martin purchased a purpose-built flat in Melksham in August 2001. The question was if we could approximate the price would be to extend the lease by ninety years. Identical premises in Melksham with an extended lease were in the region of £285,000. The average ground rent payable was £45 invoiced per annum. The lease expiry date was on 2 April 2097. Taking into account 71 years unexpired we calculated the premium to the landlord to extend the lease to be between £12,400 and £14,200 not including professional charges.