Unfortunately that a Menai Bridge residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Menai Bridge property prices.Where your lease has approximately 90 years left, you need to start thinking about 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 under 80 years - otherwise a higher premium will be due. Most leasehold owners in Menai Bridge will be able to extend under the legislation; however a conveyancer should be able to clarify whether you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancer for the duration of the process.
Leasehold premises in Menai Bridge with more than 100 years outstanding 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 home. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
The conveyancers that we work with handle Menai Bridge 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.
Milo owned a 2 bedroom flat in Menai Bridge being marketed with a lease of fraction over 72 years unexpired. Milo on an informal basis spoke with his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Milo to exercise his statutory right. Milo procured expert advice and was able to make a more informed judgement and deal with the matter and readily saleable.
In 2009 we were phoned by Mr and Mrs. Y Khan who, having was assigned a lease of a studio flat in Menai Bridge in May 2012. We are asked if we could estimate the premium could be for a ninety year lease extension. Similar homes in Menai Bridge with a long lease were valued about £275,000. The average ground rent payable was £55 invoiced quarterly. The lease expired on 2 August 2103. Having 77 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 not including expenses.
In 2011 we were phoned by Mrs J Green who, having purchased a one bedroom apartment in Menai Bridge in July 2008. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by 90 years. Identical premises in Menai Bridge with a long lease were in the region of £183,600. The mid-range ground rent payable was £65 collected quarterly. The lease elapsed in 2083. Given that there were 57 years remaining we estimated the premium to the freeholder to extend the lease to be within £28,500 and £33,000 exclusive of fees.