It’s an underpublicised truth that a Moseley residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Moseley property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If the number of years remaining falls under eighty years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Moseley will be able to extend under the legislation; however a conveyancer should be able to confirm whether you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
It is generally considered that a residential leasehold with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years remaining, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service will provide you increased control over the value of your Moseley leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Ollie, started to get close to the 80-year threshold with the lease on his two bedroom apartment in Moseley. Having bought his home two decades ago, the lease term was of little interest. As luck would have it, he recognised he would imminently be paying an inflated amount for a lease extension. Ollie arranged for a lease extension just under the wire last September. Ollie and the landlord in the end settled on a premium of £5,000 . If he failed to meet the deadline, the sum would have become more costly by a minimum £1,075.
Last Summer we were called by Ms Rhiannon Taylor , who acquired a purpose-built apartment in Moseley in September 2008. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Comparative properties in Moseley with a long lease were valued around £264,000. The average amount of ground rent was £60 invoiced annually. The lease ended in 2079. Taking into account 53 years outstanding we approximated the premium to the freeholder for the lease extension to be within £37,100 and £42,800 plus legals.
In 2009 we were approached by Mr and Mrs. A Taylor who, having completed a recently refurbished flat in Moseley in June 1995. The dilemma was if we could estimate the premium could be to extend the lease by ninety years. Similar homes in Moseley with 100 year plus lease were valued around £225,400. The average amount of ground rent was £45 invoiced every twelve months. The lease ended in 2090. Given that there were 64 years as a residual term we approximated the premium to the landlord for the lease extension to be within £16,200 and £18,600 exclusive of costs.