It’s an underpublicised truth that a Millom residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Millom property market.Where your lease has approximately 90 years left, you need to start considering a lease extension. If the number of years remaining drops under eighty years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of flat owners in Millom will be able to extend under the legislation; however a lawyer should be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables 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.
It is conventional wisdom that a property with over 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 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. |
Irrespective of whether you are a tenant or a freeholder in Millom,the lease extension experts 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 Millom valuers.
Teddy was the the leasehold owner of a 2 bedroom flat in Millom being sold with a lease of fraction over fifty eight years unexpired. Teddy on an informal basis spoke with his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 annually. Ordinarily, ground rent would not be due on a lease extension were Teddy to invoke his statutory right. Teddy procured expert legal guidance and secured satisfactory deal without going to tribunal and sell the flat.
Mr and Mrs. N Khan acquired a purpose-built apartment in Millom in September 2012. The question was if we could approximate the price would be for a 90 year lease extension. Identical flats in Millom with an extended lease were worth £235,200. The mid-range amount of ground rent was £45 billed quarterly. The lease end date was on 19 June 2092. Considering the 66 years outstanding we estimated the premium to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of legals.
Last year we were approach by Mr and Mrs. A Simon , who owned a ground floor flat in Millom in April 2002. The question was if we could estimate the price could be for a 90 year extension to my lease. Comparable flats in Millom with 100 year plus lease were worth £280,000. The mid-range amount of ground rent was £55 collected quarterly. The lease end date was in 2103. Taking into account 77 years remaining we approximated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 plus fees.