Unfortunately that a Montpelier residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Montpelier property market.Where your lease has approximately 90 years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under eighty years - otherwise a higher premium will be payable. Most flat owners in Montpelier will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
Leasehold residencies in Montpelier with over 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Montpelier,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Montpelier valuers.
Leon was the the leasehold owner of a studio apartment in Montpelier being sold with a lease of a little over 72 years left. Leon informally approached his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent initially set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Leon to invoke his statutory right. Leon obtained expert legal guidance and was able to make an informed decision and handle with the matter and ending up with a market value flat.
Last Christmas we were phoned by Mr and Mrs. B Hill , who completed a one bedroom apartment in Montpelier in September 2003. We are asked if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Comparative residencies in Montpelier with 100 year plus lease were in the region of £295,000. The mid-range ground rent payable was £45 invoiced yearly. The lease ran out on 18 June 2099. Given that there were 74 years outstanding we calculated the premium to the landlord for the lease extension to be between £8,600 and £9,800 plus legals.
In 2010 we were e-mailed by Mr and Mrs. K Girard who, having acquired a one bedroom flat in Montpelier in May 1996. We are asked if we could estimate the premium would likely be to prolong the lease by a further 90 years. Comparable premises in Montpelier with an extended lease were valued around £248,000. The mid-range amount of ground rent was £65 billed quarterly. The lease expired on 6 August 2088. Considering the 63 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £20,000 and £23,000 not including costs.