Mossley leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. It is the case that most Mossley tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Mossley you should check if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is generally accepted that a property with more than 100 years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises 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 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; |
| Coventry Building Society | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake Mossley 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.
Subsequent to lengthy negotiations with the freeholder of her purpose-built apartment in Mossley, Imogen initiated the lease extension process just as her lease was nearing the crucial eighty-year threshold. The transaction was finalised in April 2014. The freeholder’s charges were kept to an absolute minimum.
Last month we were e-mailed by Ms A Martin , who owned a studio flat in Mossley in February 1996. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year lease extension. Comparable residencies in Mossley with an extended lease were in the region of £246,800. The average amount of ground rent was £60 billed quarterly. The lease ended on 13 August 2076. Given that there were 50 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £44,700 and £51,600 exclusive of expenses.
In 2013 we were called by Dr Niamh Lefebvre who, having was assigned a lease of a first floor apartment in Mossley in September 2010. The dilemma was if we could approximate the price could be to extend the lease by 90 years. Identical residencies in Mossley with an extended lease were in the region of £208,200. The average ground rent payable was £65 invoiced monthly. The lease ran out in 2087. Having 61 years left we estimated the compensation to the landlord to extend the lease to be within £19,000 and £22,000 exclusive of legals.