It’s a harsh truth that a Moreton residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Moreton property prices.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips under 80 years - otherwise a higher premium will be due. Most leasehold owners in Moreton will be able to extend under the legislation; however a lawyer will be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold premises in Moreton with in excess of 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the freehold 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 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Moreton,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Moreton valuers.
During the course of the last few months Andrew, came critically close to the eighty-year mark with the lease on his purpose- built apartment in Moreton. Having purchased his home twenty years previously, the unexpired term was of little significance. As luck would have it, he realised he needed to take action soon on Extending the lease. Andrew arranged for a lease extension just under the wire last June. Andrew and the landlord subsequently settled on sum of £5,500 . If he failed to meet the deadline, the premium would have increased by at least £1,125.
Ms Jessica David purchased a first floor apartment in Moreton in October 2012. The question was if we could approximate the price could be to prolong the lease by ninety years. Identical flats in Moreton with 100 year plus lease were in the region of £225,400. The average amount of ground rent was £45 collected yearly. The lease ran out on 19 January 2090. Considering the 64 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £15,200 and £17,600 not including legals.
Last year we were phoned by Mr and Mrs. P Morgan , who took over the lease of a one bedroom flat in Moreton in June 2012. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by a further 90 years. Identical residencies in Moreton with an extended lease were valued about £270,000. The average amount of ground rent was £55 invoiced annually. The lease lapsed on 2 July 2101. Taking into account 75 years as a residual term we estimated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 plus costs.