It’s an underpublicised truth that a Moor Row residential lease is a deteriorating 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 reduction being disguised by increases in the Moor Row property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If lease term falls under 80 years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Moor Row will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the process.
Leasehold properties in Moor Row with over 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Engaging our service gives you increased control over the value of your Moor Row leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Blake, started to get near to the eighty-year threshold with the lease on his one bedroom apartment in Moor Row. Having bought his property 19 years previously, the lease term was of little concern. Fortunately, it dawned on him that he would imminently be paying an escalated premium for Extending the lease. Blake extended the lease at the eleventh hour last March. Blake and the freeholder ultimately settled on an amount of £5,500 . If the lease had gone lower than eighty years, the amount would have become more exhorbitant by a minimum £875.
In 2014 we were contacted by Mr and Mrs. V Torres who, having completed a first floor flat in Moor Row in May 2012. We are asked if we could approximate the compensation to the landlord would be for a ninety year lease extension. Similar homes in Moor Row with 100 year plus lease were valued around £184,000. The average amount of ground rent was £55 collected per annum. The lease expired in 2078. Considering the 53 years unexpired we estimated the premium to the landlord to extend the lease to be within £28,500 and £33,000 plus legals.
Last Summer we were phoned by Dr Blake Hall , who moved into a ground floor apartment in Moor Row in June 1997. The question was if we could approximate the premium would likely be to extend the lease by ninety years. Identical properties in Moor Row with a long lease were in the region of £290,000. The mid-range ground rent payable was £45 collected quarterly. The lease terminated on 9 August 2098. Having 73 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 plus expenses.