There is no doubt about it a leasehold flat or house in Mitcheldean is a wasting asset as a result of the diminishing lease term. Where the lease has, beyond one hundred years remaining then this decrease may be of little impact nevertheless there will become a stage when a lease has under than eighty years left as part of the premium you will incur is what is termed as a marriage value. This could increase markedly the cost. It is the main reason why you should consider extending without delay. Many flat owners in Mitcheldean will meet the qualifying criteria; nevertheless a conveyancer can confirm whether you are eligible to extend your lease. In certain situations you may not qualify, the most common reason being that you have owned the property for under two years.
Leasehold residencies in Mitcheldean with in excess of one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| 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. |
The conveyancers that we work with procure Mitcheldean 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.
Jamie owned a high value apartment in Mitcheldean on the market with a lease of just over 59 years unexpired. Jamie on an informal basis approached his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Jamie to exercise his statutory right. Jamie procured expert legal guidance and secured satisfactory deal without resorting to tribunal and readily saleable.
Last Autumn we were phoned by Ms I Martin , who acquired a newly refurbished apartment in Mitcheldean in May 2009. The dilemma was if we could estimate the premium would be for a 90 year extension to my lease. Similar premises in Mitcheldean with 100 year plus lease were in the region of £265,000. The average ground rent payable was £50 collected yearly. The lease expired in 2098. Taking into account 73 years left we approximated the premium to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of costs.
Last Christmas we were called by Dr Jonathan Edwards , who acquired a newly refurbished flat in Mitcheldean in September 2002. The question was if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Comparative properties in Mitcheldean with a long lease were in the region of £264,000. The mid-range ground rent payable was £60 invoiced per annum. The lease lapsed in 2078. Considering the 53 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £37,100 and £42,800 exclusive of fees.