Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will ordinarily be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in New Milton. Inevitably, the term of lease remaining shortens over time. This is often ignored and only raises itself as an issue when the flat or house needs to be sold or refinanced. The shorter the lease the lower the value of the property and the more expensive it will be to extend the lease. Eligible long lease owners in New Milton have the legal entitlement to extend the lease for a further ninety years under statute. Please give careful consideration before delaying your New Milton lease extension. Putting off that expense now simply increases the price you will eventually incur to extend your lease
Leasehold residencies in New Milton with over 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in New Milton can be a difficult process. We recommend you obtain professional help from a lawyer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring New Milton lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Dylan owned a studio apartment in New Milton on the market with a lease of a little over sixty years unexpired. Dylan on an informal basis approached his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Dylan to exercise his statutory right. Dylan procured expert advice and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
Last month we were phoned by Dr D Taylor , who bought a one bedroom apartment in New Milton in January 1996. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year lease extension. Similar flats in New Milton with 100 year plus lease were in the region of £166,400. The average amount of ground rent was £60 invoiced annually. The lease elapsed in 2080. Taking into account 54 years left we calculated the premium to the freeholder to extend the lease to be within £32,300 and £37,400 not including legals.
Last month we were e-mailed by Mr L Roberts , who took over the lease of a garden flat in New Milton in April 2012. We are asked if we could approximate the compensation to the landlord would be to extend the lease by 90 years. Identical premises in New Milton with a long lease were in the region of £232,800. The average ground rent payable was £45 invoiced monthly. The lease came to a finish on 11 July 2091. Taking into account 65 years outstanding we approximated the premium to the landlord for the lease extension to be within £13,300 and £15,400 not including expenses.