Unfortunately that a Milton Keynes residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Milton Keynes property market.Where your lease has approximately 90 years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips lower than eighty years - otherwise a higher amount will be payable. Most leasehold owners in Milton Keynes will be able to extend under the legislation; however a conveyancer will be able to clarify if you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer throughout the formalities.
Leasehold premises in Milton Keynes with in excess of one hundred years outstanding on the lease are often referred to as ‘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 reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | 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. |
The conveyancers that we work with procure Milton Keynes 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 lawyer we work with provide it.
Subsequent to unsuccessful negotiations with the landlord of her first floor apartment in Milton Keynes, Emily initiated the lease extension process as the eighty year deadline was quickly coming. The lease extension was concluded in November 2015. The landlord’s costs were kept to an absolute minimum.
In 2013 we were contacted by Mr and Mrs. M Hill who, having owned a purpose-built flat in Milton Keynes in May 1995. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by ninety years. Comparative flats in Milton Keynes with 100 year plus lease were worth £225,800. The average amount of ground rent was £60 collected per annum. The lease ran out in 2085. Given that there were 60 years outstanding we calculated the compensation to the landlord to extend the lease to be within £23,800 and £27,400 plus fees.
In 2010 we were phoned by Dr R Taylor who, having acquired a studio flat in Milton Keynes in March 2006. The question was if we could approximate the premium could be to extend the lease by an additional years. Identical homes in Milton Keynes with an extended lease were worth £210,000. The mid-range ground rent payable was £50 invoiced per annum. The lease expired on 26 March 2105. Considering the 80 years outstanding we calculated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 not including fees.