There is no doubt about it a leasehold flat or house in Milnthorpe is a wasting asset as a result of the shortening lease. Where the lease has, over 99 years to run then this decrease may be of little impact however there will become a stage when a lease has less than eighty years left as part of the premium you will incur is what is known as a marriage value. This could increase sharply the cost. It is the primary reason why you should extend the lease without delay. Many flat owners in Milnthorpe will qualify for this right; however a conveyancer can advise whether you are eligible for a lease extension. In limited situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
Leasehold properties in Milnthorpe with more than 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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. |
The conveyancers 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 conveyancer we work with provide it.
Following unsuccessful discussions with the freeholder of her one bedroom apartment in Milnthorpe, Isabel started the lease extension process as the 80 year mark was swiftly coming. The lease extension completed in October 2006. The freeholder’s fees were negotiated to less than 700 pounds.
Mr and Mrs. C Fournier was assigned a lease of a first floor apartment in Milnthorpe in April 2004. We are asked if we could approximate the compensation to the landlord would be to extend the lease by an additional years. Similar residencies in Milnthorpe with a long lease were in the region of £205,000. The average amount of ground rent was £50 invoiced annually. The lease ended on 26 January 2104. Having 79 years outstanding we estimated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 not including fees.
In 2012 we were called by Mr and Mrs. H Mason who, having moved into a first floor flat in Milnthorpe in March 2001. We are asked if we could shed any light on how much (approximately) price would be for a 90 year lease extension. Comparable flats in Milnthorpe with an extended lease were in the region of £275,000. The average amount of ground rent was £65 billed annually. The lease came to a finish on 7 January 2093. Given that there were 68 years unexpired we approximated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 plus expenses.