The market value of a leasehold property in Milnthorpe depends on how many years the lease has left to run. If it is near to or fewer than 80 years you should envisage problems on re-sale, so it is recommended to arrange for the lease to be extended before purchasing. It is preferable to commence the lease extension process when a lease still has 82 years remaining so that a lease extension can be addressed ahead of the eighty year cut off point. Statute enables Milnthorpe qualifying lessees to acquire a lease extension of ninety years on top of the remaining lease term at a peppercorn rent (that is, rent free). The purpose of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Halifax | Minimum 70 years from the date 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide you better control over the value of your Milnthorpe leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Ollie, came perilously close to the 80-year mark with the lease on his basement flat in Milnthorpe. Having purchased his home 18 years previously, the unexpired term was of little interest. Thankfully, he realised he would soon be paying an inflated amount for Extending the lease. Ollie extended the lease just in the nick of time last January. Ollie and the freeholder via the managing agents in the end settled on an amount of £5,500 . If he had missed the deadline, the figure would have increased by at least £1,100.
Mr Gabriel Pérez bought a studio apartment in Milnthorpe in June 2000. We are asked if we could estimate the price could be to prolong the lease by a further 90 years. Identical premises in Milnthorpe with 100 year plus lease were in the region of £260,200. The mid-range amount of ground rent was £65 billed every twelve months. The lease elapsed in 2092. Given that there were 66 years remaining we calculated the premium to the freeholder for the lease extension to be within £15,200 and £17,600 exclusive of costs.
Last year we were phoned by Mr and Mrs. B Michel , who moved into a one bedroom flat in Milnthorpe in March 2000. The question was if we could estimate the premium would likely be to prolong the lease by a further 90 years. Similar homes in Milnthorpe with 100 year plus lease were valued around £198,800. The mid-range ground rent payable was £55 collected every twelve months. The lease ran out on 12 February 2081. Having 55 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £33,300 and £38,400 not including expenses.