Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will normally be granted for a fixed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Millom. Clearly, the length of lease remaining reduces as time goes by. This is often ignored and only becomes a problem when the residence needs to be sold or refinanced. The shorter the lease the less it is worth and the more expensive it will be to procure a lease extension. Eligible long lease owners in Millom have the legal entitlement to extend the lease for a further 90 years in accordance with the 1993 Leasehold Reform Act. Please give careful attention before delaying your Millom lease extension. Holding off that expense now likely increases the price you will eventually incur to extend your lease
Leasehold premises in Millom with over one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Millom,the lease extension experts 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 Millom valuers.
Muhammad owned a studio flat in Millom being sold with a lease of fraction over fifty eight years outstanding. Muhammad informally approached his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Muhammad to exercise his statutory right. Muhammad procured expert advice and secured satisfactory deal without going to tribunal and sell the property.
In 2013 we were e-mailed by Dr Jasper Harris who, having took over the lease of a newly refurbished apartment in Millom in May 1995. We are asked if we could estimate the price would be for a 90 year extension to my lease. Comparable homes in Millom with an extended lease were worth £176,200. The mid-range amount of ground rent was £65 invoiced yearly. The lease expired in 2081. Considering the 56 years unexpired we calculated the premium to the landlord for the lease extension to be between £29,500 and £34,000 not including fees.
Last year we were e-mailed by Dr J Baker , who moved into a one bedroom flat in Millom in June 1999. The question was if we could estimate the compensation to the landlord would be to prolong the lease by 90 years. Identical premises in Millom with 100 year plus lease were worth £242,600. The mid-range ground rent payable was £45 billed per annum. The lease came to a finish in 2092. Having 67 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £11,400 and £13,200 exclusive of costs.