Moor Row leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Moor Row tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Moor Row you really ought to investigate if your lease has between seventy and ninety years remaining. There are good reasons why a Moor Row flat owner with a lease having around eighty years left should take steps to ensure that a lease extension is effected without delay
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 35 years left, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| 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 Moor Row,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Moor Row valuers.
Ollie was the the leasehold proprietor of a 2 bedroom apartment in Moor Row on the market with a lease of just over sixty years outstanding. Ollie informally spoke with his freeholder a well known local-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 on the basis of a rise in the rent to £125 yearly. No ground rent would be payable on a lease extension were Ollie to invoke his statutory right. Ollie obtained expert advice and secured satisfactory resolution without resorting to tribunal and sell the flat.
In 2013 we were approached by Dr Rory Vincent who, having took over the lease of a ground floor apartment in Moor Row in January 2002. The dilemma was if we could estimate the price could be to prolong the lease by ninety years. Identical flats in Moor Row with an extended lease were valued about £208,600. The average amount of ground rent was £60 billed every twelve months. The lease ended in 2083. Taking into account 57 years remaining we calculated the compensation to the landlord for the lease extension to be within £30,400 and £35,200 exclusive of legals.
Mr and Mrs. H Johnson acquired a basement flat in Moor Row in March 2006. The dilemma was if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Comparable properties in Moor Row with a long lease were worth £200,000. The mid-range amount of ground rent was £50 collected annually. The lease lapsed in 2103. Taking into account 77 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 not including expenses.