Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will normally be granted for a fixed period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Morganstown. Clearly, the term of lease remaining reduces over time. This may pass by relatively unnoticed when the property needs to be sold or refinanced. The shorter the lease the less it is worth and the more expensive it will be to extend the lease. Eligible long lease owners in Morganstown have the right to extend the lease for a further 90 years under statute. Do give due deliberation before delaying your Morganstown lease extension. Putting off that expense now simply increases the price you will eventually incur to extend your lease
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| 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. |
Regardless of whether you are a tenant or a landlord in Morganstown,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Morganstown valuers.
Felix owned a 2 bedroom apartment in Morganstown being sold with a lease of just over 72 years unexpired. Felix on an informal basis spoke with his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Felix to exercise his statutory right. Felix obtained expert advice and secured satisfactory deal informally and ending up with a market value flat.
Mr and Mrs. L Kelly moved into a garden flat in Morganstown in February 1995. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by 90 years. Comparable premises in Morganstown with 100 year plus lease were worth £275,000. The mid-range ground rent payable was £65 collected quarterly. The lease terminated in 2093. Considering the 68 years outstanding we approximated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 plus expenses.
Last Autumn we were approach by Mr and Mrs. T Jones , who bought a recently refurbished flat in Morganstown in September 1998. We are asked if we could estimate the premium could be to extend the lease by a further 90 years. Comparative homes in Morganstown with 100 year plus lease were in the region of £208,600. The average ground rent payable was £60 billed monthly. The lease came to a finish in 2082. Given that there were 57 years remaining we approximated the compensation to the freeholder to extend the lease to be within £30,400 and £35,200 plus professional charges.