Moorgate 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 your lease gets more expensive. The majority of owners of residential leasehold property in Moorgate enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Moorgate you would be well advised to see if your lease has between 70 and ninety years left. There are compelling reasons why a Moorgate flat owner with a lease having around eighty years remaining should take action to make sure that a lease extension is effected without delay
Leasehold residencies in Moorgate with more than 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Chelsea 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. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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. |
The conveyancers that we work with handle Moorgate lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Half a year ago Felix, started to get near to the eighty-year mark with the lease on his studio flat in Moorgate. Having bought his flat 19 years ago, the length of the lease was of no importance. Fortunately, he recognised he would soon be paying way over the odds for a lease extension. Felix arranged for a lease extension just ahead of time in April. Felix and the freeholder in the end agreed on the final figure of £5,000 . If he failed to meet the deadline, the sum would have become more exhorbitant by at least £850.
Ms Natalie Morgan was assigned a lease of a ground floor apartment in Moorgate in February 2001. The dilemma was if we could estimate the premium would be to extend the lease by an additional years. Similar premises in Moorgate with a long lease were worth £300,000. The average amount of ground rent was £50 collected monthly. The lease concluded in 2101. Considering the 76 years outstanding we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 plus fees.
An example of a Lease Extension decision for a Moorgate flat is 137 & 139 Haberdasher Street in December 2013. The Tribunal determines in accordance with section 48 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 that the premium for the extended lease for each Property should be £12,350.00. This case related to 2 flats. The unexpired residue of the current lease was 72.39 years.