Montpelier leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Most owners of residential leasehold property in Montpelier enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Montpelier you must see if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is generally accepted that a residential leasehold with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
Regardless of whether you are a tenant or a landlord in Montpelier,the lease extension lawyers 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.
Stanley owned a 2 bedroom apartment in Montpelier being marketed with a lease of a few days over 61 years left. Stanley on an informal basis contacted his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Stanley to exercise his statutory right. Stanley procured expert legal guidance and secured satisfactory resolution without going to tribunal and readily saleable.
In 2011 we were contacted by Mr O Young who, having owned a purpose-built apartment in Montpelier in July 2002. The question was if we could estimate the premium would be to extend the lease by ninety years. Identical flats in Montpelier with a long lease were valued about £223,400. The mid-range ground rent payable was £60 collected monthly. The lease lapsed in 2084. Having 59 years left we calculated the compensation to the freeholder for the lease extension to be within £27,600 and £31,800 exclusive of expenses.
Last year we were e-mailed by Ms Erin Cooper , who moved into a one bedroom flat in Montpelier in September 2000. The question was if we could approximate the price would likely be to extend the lease by 90 years. Similar properties in Montpelier with 100 year plus lease were in the region of £205,000. The average ground rent payable was £50 billed quarterly. The lease concluded on 13 April 2104. Having 79 years as a residual term we approximated the premium to the landlord to extend the lease to be between £8,600 and £9,800 not including legals.