For anyone whose Milton home is held on a long lease, the message is clear – if you ignore the situation, your property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to obtain a lease extension.
Leasehold residencies in Milton with more than one hundred years remaining on the lease are sometimes 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 to be gained by 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 |
| 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. |
Regardless of whether you are a tenant or a freeholder in Milton,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Milton valuers.
After protracted discussions with the freeholder of her purpose-built flat in Milton, Sophia commenced the lease extension process just as her lease was approaching the crucial eighty-year threshold. The transaction was concluded in April 2013. The freeholder’s charges were negotiated to slightly above 500 GBP.
In 2010 we were approached by Ms Freya Leroy who, having was assigned a lease of a one bedroom flat in Milton in August 1999. We are asked if we could estimate the price could be for a 90 year extension to my lease. Identical homes in Milton with 100 year plus lease were worth £242,600. The mid-range ground rent payable was £45 billed every twelve months. The lease lapsed on 3 September 2091. Taking into account 67 years remaining we calculated the premium to the freeholder for the lease extension to be between £11,400 and £13,200 exclusive of legals.
In 2014 we were contacted by Mr and Mrs. O Cox who, having acquired a one bedroom flat in Milton in February 2000. The dilemma was if we could approximate the premium would be for a 90 year lease extension. Similar homes in Milton with 100 year plus lease were valued about £280,000. The mid-range ground rent payable was £55 billed per annum. The lease concluded in 2102. Having 78 years remaining we approximated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 plus professional charges.