Milnthorpe leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Milnthorpe residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Milnthorpe you would be well advised to see if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Milnthorpe with more than 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| 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. |
| 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. |
| 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. |
Lease extensions in Milnthorpe can be a difficult process. We recommend you secure guidance from a lawyer and surveyor with experience in this area.
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.
William owned a conversion flat in Milnthorpe on the market with a lease of fraction over 59 years remaining. William informally spoke with his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was prepared 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. No ground rent would be payable on a lease extension were William to invoke his statutory right. William obtained expert legal guidance and was able to make an informed decision and handle with the matter and ending up with a market value flat.
Last Christmas we were contacted by Dr R Martinez , who purchased a first floor flat in Milnthorpe in September 2003. The question was if we could approximate the premium could be for a ninety year lease extension. Comparative homes in Milnthorpe with a long lease were in the region of £285,000. The average ground rent payable was £45 collected per annum. The lease expired in 2096. Considering the 71 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 plus legals.
Last Spring we were called by Dr K Wilson , who acquired a purpose-built flat in Milnthorpe in May 2009. We are asked if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Identical residencies in Milnthorpe with a long lease were valued about £225,800. The average ground rent payable was £60 billed every twelve months. The lease elapsed in 2085. Considering the 60 years left we approximated the premium to the landlord to extend the lease to be between £23,800 and £27,400 not including expenses.