It’s a harsh certainty that a Melton Mowbray residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Melton Mowbray property market.Where your lease has approximately ninety years left, you need to 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 falls lower than eighty years - otherwise a higher premium will be due. Most flat owners in Melton Mowbray will be able to extend under the legislation; however a lawyer should be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the residence will be worth the same as a freehold for decades to come.
| 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. |
| 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 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; |
| Godiva Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Regardless of whether you are a tenant or a freeholder in Melton Mowbray,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Melton Mowbray valuers.
Off the back of unsuccessful discussions with the freeholder of her garden apartment in Melton Mowbray, Anna initiated the lease extension process as the eighty year threshold was swiftly coming. The lease extension completed in October 2006. The freeholder’s fees were restricted to approximately 650 GBP.
In 2011 we were phoned by Mr and Mrs. F Díaz who, having owned a ground floor flat in Melton Mowbray in May 1997. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year extension to my lease. Similar flats in Melton Mowbray with an extended lease were worth £174,200. The mid-range amount of ground rent was £55 collected yearly. The lease expired on 27 July 2076. Taking into account 51 years left we calculated the compensation to the landlord for the lease extension to be within £31,400 and £36,200 not including costs.
Mrs S Turner moved into a one bedroom flat in Melton Mowbray in March 1997. We are asked if we could estimate the premium could be to extend the lease by ninety years. Comparative premises in Melton Mowbray with 100 year plus lease were worth £285,000. The average amount of ground rent was £45 billed every twelve months. The lease ended in 2096. Given that there were 71 years outstanding we calculated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 plus legals.