Unfortunately that a Montacute residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Montacute property market.Once your lease nears 85ish years, you should start thinking about a lease extension. If the number of years remaining falls under eighty years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most flat owners in Montacute will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer throughout the process.
Leasehold premises in Montacute with over 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges warrant 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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 |
| 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 undertake Montacute 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.
Eliot owned a conversion apartment in Montacute being sold with a lease of a little over fifty eight years outstanding. Eliot on an informal basis spoke with his freeholder being a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Eliot to invoke his statutory right. Eliot procured expert legal guidance and was able to make an informed judgement and handle with the matter and readily saleable.
Mr and Mrs. P Bell took over the lease of a first floor apartment in Montacute in May 1995. The question was if we could estimate the compensation to the landlord would be to prolong the lease by ninety years. Similar premises in Montacute with an extended lease were worth £285,000. The average amount of ground rent was £45 collected annually. The lease concluded on 11 July 2097. Having 72 years as a residual term we approximated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 plus fees.
Mr and Mrs. J Morris was assigned a lease of a studio apartment in Montacute in February 2004. We are asked if we could estimate the price could be to extend the lease by an additional years. Comparable residencies in Montacute with 100 year plus lease were worth £233,200. The mid-range ground rent payable was £60 billed yearly. The lease ended in 2086. Given that there were 61 years outstanding we estimated the compensation to the landlord for the lease extension to be within £22,800 and £26,400 exclusive of fees.