Mickleover leases on domestic deteriorating in value. Where your lease has about 90 years remaining, you should start thinking about a lease extension. 80 years is a significant number: when the unexpired term of a lease falls below this level then you start paying an additional element called marriage value. Leasehold owners in Mickleover will mostly qualify for a lease extension; however a solicitor should be able confirm if you qualify. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced so it’s prudent to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| 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. |
| 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. |
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with undertake Mickleover 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 lawyer we work with provide it.
Benjamin owned a 2 bedroom apartment in Mickleover being marketed with a lease of a few days over 72 years outstanding. Benjamin on an informal basis contacted his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 annually. No ground rent would be due on a lease extension were Benjamin to exercise his statutory right. Benjamin procured expert legal guidance and was able to make an informed decision and deal with the matter and readily saleable.
In 2009 we were approached by Dr J Baker who, having completed a ground floor flat in Mickleover in November 1997. We are asked if we could approximate the price would likely be for a ninety year lease extension. Identical properties in Mickleover with a long lease were valued around £191,400. The average ground rent payable was £55 collected quarterly. The lease expired on 21 June 2080. Taking into account 54 years outstanding we calculated the compensation to the freeholder for the lease extension to be within £34,200 and £39,600 plus legals.
Last Spring we were e-mailed by Dr Matthew Jones , who moved into a one bedroom apartment in Mickleover in April 2001. We are asked if we could approximate the compensation to the landlord would be for a 90 year lease extension. Comparative flats in Mickleover with a long lease were valued around £295,000. The mid-range ground rent payable was £45 invoiced per annum. The lease elapsed in 2100. Taking into account 74 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of expenses.