For anyone whose Milnthorpe property is held on a long lease, the message is clear – if no remedial action is taken, the property will eventually revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to extend the lease.
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Milnthorpe can be a difficult process. We recommend you obtain guidance from a conveyancer and surveyor well versed in the legislation and lease extension process.
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 Milnthorpe lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
After protracted correspondence with the landlord of her studio flat in Milnthorpe, Naomi commenced the lease extension process just as the lease was coming close to the critical eighty-year threshold. The transaction was concluded in November 2007. The landlord’s costs were negotiated to under 600 GBP.
Last Autumn we were called by Mr and Mrs. V Flores , who owned a first floor apartment in Milnthorpe in April 1997. The question was if we could estimate the compensation to the landlord would likely be to prolong the lease by an additional years. Identical homes in Milnthorpe with an extended lease were worth £295,000. The average ground rent payable was £50 invoiced every twelve months. The lease terminated in 2100. Considering the 75 years as a residual term we calculated the premium to the landlord to extend the lease to be between £8,600 and £9,800 not including costs.
Ms L Collins acquired a one bedroom apartment in Milnthorpe in March 1996. We are asked if we could estimate the price would be to prolong the lease by an additional years. Comparable premises in Milnthorpe with an extended lease were worth £250,400. The average amount of ground rent was £65 invoiced every twelve months. The lease ran out on 23 July 2089. Having 64 years remaining we approximated the premium to the landlord for the lease extension to be within £19,000 and £22,000 not including professional charges.