There is no doubt about it a leasehold flat or house in Moss Nook is a wasting asset as a result of the diminishing lease term. If the residual term has, beyond 99 years to run then this decrease may be of little impact however there will become a point in time when a lease has fewer than eighty years left as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main logic behind why you should consider extending sooner than later. Most flat owners in Moss Nook will qualify for this right; nevertheless a conveyancing solicitor can confirm whether you are eligible for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
It is generally considered that a property with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 45 years left, the premises will be worth the same as a freehold for many years ahead.
| 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 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; |
| Lloyds TSB Scotland | 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 gives you increased control over the value of your Moss Nook leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
18 months ago Lewis, started to get near to the eighty-year mark with the lease on his first floor flat in Moss Nook. In buying his property two decades ago, the length of the lease was of little bearing. As luck would have it, he realised he needed to take action soon on Extending the lease. Lewis arranged for a lease extension just in the nick of time last June. Lewis and the freeholder ultimately settled on a premium of £5,500 . If the lease had dipped to less than 80 years, the premium would have escalated by at least £1,025.
Last year we were e-mailed by Mr and Mrs. L Walker , who took over the lease of a recently refurbished apartment in Moss Nook in June 2011. The question was if we could shed any light on how much (roughly) premium would be to extend the lease by 90 years. Comparable residencies in Moss Nook with an extended lease were worth £191,400. The mid-range amount of ground rent was £55 collected per annum. The lease ran out in 2080. Having 54 years unexpired we calculated the premium to the landlord to extend the lease to be between £34,200 and £39,600 not including legals.
Last month we were phoned by Dr C Wilson , who acquired a one bedroom flat in Moss Nook in May 2001. The dilemma was if we could approximate the price would likely be to prolong the lease by a further 90 years. Similar flats in Moss Nook with 100 year plus lease were valued around £295,000. The mid-range ground rent payable was £45 invoiced quarterly. The lease termination date was in 2100. Given that there were 74 years outstanding we approximated the premium to the landlord to extend the lease to be within £8,600 and £9,800 plus fees.