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Why you should commence your Milnthorpe lease extension


Why you should start your Milnthorpe lease extension today:

A Milnthorpe leasehold property depreciates with the years remaining on the lease.

Milnthorpe leases on domestic properties are gradually losing value. if your lease has approximately ninety years remaining, you should start thinking about a lease extension. If lease term dips under 80 years, you will then be required to pay half of the property's 'marriage value' on top of the standard cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Flat owners in Milnthorpe will usually be legally entitled to a lease extension; however it’s a good idea to check with a lawyer to confirm if you qualify. In certain situations you may not qualify. There are also strict timetables and steps to comply with once the process has started so it’s best to be guided by a conveyancing solicitor during the process.

Milnthorpe property with a lease extension is almost the same value as a freehold

Leasehold premises in Milnthorpe with more than one hundred years remaining 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 buying the reversionary interest unless savings on ground rent and maintenance charges justify it.

Mortgage lenders may decide not to lend with a short lease

Banks and building societies differ in their lending requirements. Some set the bar at 75 years left on the lease; others may be willing to lend with anything with more than 70 years. Below 60 years, it may be difficult to obtain a mortgage in the first place.

Lender Requirement
Birmingham Midshires Minimum 70 years from the date of the mortgage.
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.
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.
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



What makes us experts in Milnthorpe lease extensions?

The conveyancing solicitors that we work with procure Milnthorpe 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 conveyancing solicitor we work with provide it.

Milnthorpe Lease Extension Case Summaries:

Tommy, Milnthorpe, Cumbria,

Tommy was the the leasehold owner of a studio flat in Milnthorpe on the market with a lease of a little over 61 years unexpired. Tommy on an informal basis approached his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Tommy to exercise his statutory right. Tommy obtained expert advice and was able to make a more informed decision and handle with the matter and sell the property.

Milnthorpe case:

Mrs Emma Kelly was assigned a lease of a ground floor flat in Milnthorpe in July 2011. The dilemma was if we could approximate the premium could be to extend the lease by ninety years. Comparative properties in Milnthorpe with an extended lease were valued about £300,000. The average amount of ground rent was £50 collected yearly. The lease terminated on 15 February 2096. Having 75 years left we estimated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 not including professional charges.

Milnthorpe case:

Mrs Molly Stewart took over the lease of a first floor flat in Milnthorpe in September 2009. We are asked if we could approximate the premium would be to prolong the lease by 90 years. Comparable homes in Milnthorpe with an extended lease were in the region of £250,400. The average amount of ground rent was £65 billed yearly. The lease elapsed on 7 August 2085. Given that there were 64 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £19,000 and £22,000 plus legals.