The value of Moreton In Marsh leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate significantly once the unexpired lease term is less than 80 years
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date 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. |
Engaging our service will provide you enhanced control over the value of your Moreton In Marsh leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Joshua, started to get near to the 80-year threshold with the lease on his two bedroom apartment in Moreton In Marsh. In buying his home 18 years ago, the lease term was of little bearing. Luckily, it dawned on him that he would soon be paying an inflated amount for Extending the lease. Joshua was able to extend his lease just in the nick of time in August. Joshua and the freeholder via the management company in the end settled on sum of £5,500 . If he had missed the deadline, the premium would have gone up by at least £950.
In 2013 we were called by Mrs D Harris who, having was assigned a lease of a ground floor apartment in Moreton In Marsh in September 1996. We are asked if we could shed any light on how much (approximately) price would be to prolong the lease by an additional years. Comparative properties in Moreton In Marsh with 100 year plus lease were in the region of £218,000. The mid-range ground rent payable was £45 invoiced annually. The lease concluded on 20 April 2088. Given that there were 63 years remaining we calculated the premium to the freeholder for the lease extension to be between £17,100 and £19,800 exclusive of legals.
Last Autumn we were approach by Dr Ali Cooper , who took over the lease of a basement flat in Moreton In Marsh in February 2004. The question was if we could approximate the compensation to the landlord would be for a 90 year extension to my lease. Comparative residencies in Moreton In Marsh with 100 year plus lease were worth £265,000. The average amount of ground rent was £50 billed quarterly. The lease came to a finish in 2099. Given that there were 74 years left we calculated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus fees.