With a residential leasehold premises in New Milton, you are actually buying a right to reside in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may think about a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly particularly when there are fewer than 80 years remaining. Leasehold owners in New Milton with a lease nearing 81 years left should seriously think of extending it sooner as opposed to later. When a lease has below 80 years remaining, under the current statute the landlord is entitled to calculate and demand a larger premium, assessed on a technical calculation, strangely termed as “marriage value” which is due.
Leasehold residencies in New Milton with more than 100 years left on the lease are often 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 service charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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 |
Regardless of whether you are a tenant or a freeholder in New Milton,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with New Milton valuers.
Ali owned a conversion flat in New Milton being marketed with a lease of fraction over 59 years unexpired. Ali on an informal basis approached his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Ali to exercise his statutory right. Ali obtained expert legal guidance and secured satisfactory resolution informally and sell the property.
In 2009 we were phoned by Dr B André who, having moved into a ground floor apartment in New Milton in May 2009. The question was if we could estimate the premium could be for a 90 year lease extension. Identical premises in New Milton with an extended lease were in the region of £256,600. The mid-range amount of ground rent was £60 billed annually. The lease end date was on 13 November 2077. Considering the 52 years unexpired we approximated the premium to the freeholder for the lease extension to be between £41,800 and £48,400 plus costs.
Last month we were approach by Mr and Mrs. Y Bertrand , who bought a purpose-built apartment in New Milton in August 1995. We are asked if we could shed any light on how much (roughly) premium could be for a ninety year lease extension. Similar flats in New Milton with an extended lease were in the region of £218,000. The mid-range amount of ground rent was £45 billed per annum. The lease finished in 2088. Given that there were 63 years left we estimated the premium to the freeholder for the lease extension to be within £17,100 and £19,800 exclusive of professional charges.