Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will ordinarily be granted for a fixed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Moorgate. Clearly, the term of lease left shortens as time goes by. This is often overlooked and only raises itself as an issue when the residence needs to be disposed of or refinanced. The shorter the lease the less it is worth and the more it will cost to obtain a lease extension. Qualifying leaseholders in Moorgate have the legal entitlement to extend the lease for an additional 90 years under Leasehold Reform legislation. Do give careful consideration before putting off your Moorgate lease extension. Holding off that expense now only increases the price you will ultimately have to pay for a lease extension
Leasehold residencies in Moorgate with in excess of 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant 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. |
| Lloyds TSB Scotland | 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. |
The conveyancing solicitors that we work with procure 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 lawyer we work with provide it.
Eli owned a conversion flat in Moorgate being sold with a lease of a little over 61 years outstanding. Eli informally spoke with his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Eli to invoke his statutory right. Eli obtained expert legal guidance and was able to make an informed decision and handle with the matter and readily saleable.
Last Summer we were approach by Mr Archie Lefebvre , who was assigned a lease of a purpose-built flat in Moorgate in June 2004. The question was if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by an additional years. Similar flats in Moorgate with an extended lease were valued around £171,800. The mid-range ground rent payable was £55 billed every twelve months. The lease ran out on 14 March 2076. Given that there were 50 years outstanding we calculated the compensation to the landlord for the lease extension to be between £32,300 and £37,400 not including fees.
An example of a Lease Extension decision for a Moorgate residence 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 affected 2 flats. The remaining number of years on the lease was 72.39 years.