Montpelier leases on domestic properties are gradually losing value. Where your lease has approximately ninety years remaining, you should start thinking about a lease extension. If lease term dips under 80 years, you will then have to pay half of the property's 'marriage value' on top of the standard cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Leasehold owners in Montpelier will usually qualify for a lease extension; however It would be wise to check with a conveyancer to check if you qualify. In certain circumstances you may not qualify. There are prescribed deadlines and formalities to comply with once the process has commenced so it’s prudent to be guided by a lawyer during the process.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Godiva Mortgages | 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with procure Montpelier 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.
Ali owned a 2 bedroom apartment in Montpelier being sold with a lease of just over 61 years outstanding. Ali informally spoke with his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £100 yearly. No ground rent would be payable on a lease extension were Ali to exercise his statutory right. Ali procured expert legal guidance and secured an acceptable resolution informally and ending up with a market value flat.
Last February we were phoned by Mr and Mrs. J Gunderson , who took over the lease of a one bedroom flat in Montpelier in January 1995. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by an additional years. Similar premises in Montpelier with an extended lease were valued about £290,000. The average ground rent payable was £45 collected every twelve months. The lease termination date was in 2098. Given that there were 72 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £11,400 and £13,200 plus fees.
Last month we were contacted by Mr and Mrs. I Gómez , who bought a studio apartment in Montpelier in January 2004. We are asked if we could shed any light on how much (roughly) premium would likely be for a 90 year lease extension. Comparative premises in Montpelier with 100 year plus lease were in the region of £233,200. The mid-range amount of ground rent was £60 collected monthly. The lease terminated in 2087. Having 61 years left we estimated the compensation to the landlord for the lease extension to be between £22,800 and £26,400 exclusive of legals.