Montpelier residential property held on a long lease is a wasting asset as the leaseholder merely owns the property for a set term.
Leasehold residencies in Montpelier with more than one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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 |
Irrespective of whether you are a tenant or a landlord in Montpelier,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Montpelier valuers.
Last Christmas Lucas, started to get close to the eighty-year threshold with the lease on his first floor apartment in Montpelier. Having purchased his flat twenty years ago, the unexpired term was of no bearing. Fortunately, it dawned on him that he needed to take action soon on Extending the lease. Lucas extended the lease just ahead of time last June. Lucas and the landlord who owned the flat above ultimately settled on sum of £6,000 . If the lease had dipped to less than 80 years, the price would have escalated by a minimum £1,100.
In 2009 we were called by Mr and Mrs. Y Sharif who, having owned a purpose-built flat in Montpelier in November 2011. The question was if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year lease extension. Identical homes in Montpelier with a long lease were in the region of £198,800. The average amount of ground rent was £55 invoiced per annum. The lease terminated on 15 February 2080. Given that there were 55 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £33,300 and £38,400 plus expenses.
Last Spring we were approach by Ms Stephanie Khan , who completed a ground floor apartment in Montpelier in July 2012. The question was if we could shed any light on how much (approximately) price could be for a ninety year lease extension. Comparative homes in Montpelier with an extended lease were valued about £300,000. The mid-range ground rent payable was £50 invoiced yearly. The lease ran out on 1 March 2100. Taking into account 75 years outstanding we estimated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 plus professional charges.