Owning a flat usually means owning a lease of the property, which has a finite term of years. This lease will usually be granted for a prescribed period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Mossley. Inevitably, the term of lease left reduces as time goes by. This may slip by relatively unnoticed when the property has to be sold or re-mortgaged. The shorter the lease the less it is worth and the more it will cost to extend the lease. Qualifying long lease owners in Mossley have the legal entitlement to extend the lease for a further ninety years under legislation. Do give careful consideration before putting off your Mossley lease extension. Holding off the cost now only increases the price you will eventually have to pay for a lease extension
Leasehold premises in Mossley with over one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and service charges justify it.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea 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. |
| 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. |
Using our service will provide you enhanced control over the value of your Mossley leasehold, as your property will be more valuable and saleable in relation to the lease length should you want 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.
Last Summer Aarav, started to get near to the eighty-year threshold with the lease on his ground floor flat in Mossley. Having bought his flat 19 years ago, the unexpired term was of little importance. Fortunately, he recognised he needed to take steps soon on Extending the lease. Aarav extended the lease at the eleventh hour in July. Aarav and the landlord in the end agreed on sum of £5,000 . If the lease had descended to less than 80 years, the price would have become more costly by at least £1,075.
In 2011 we were e-mailed by Dr O Ramírez who, having completed a ground floor apartment in Mossley in February 2001. The dilemma was if we could shed any light on how much (roughly) price could be for a ninety year extension to my lease. Identical properties in Mossley with an extended lease were valued around £208,200. The mid-range amount of ground rent was £65 billed annually. The lease concluded on 8 August 2087. Taking into account 61 years unexpired we approximated the premium to the freeholder for the lease extension to be between £20,000 and £23,000 plus costs.
In 2011 we were contacted by Mrs A Díaz who, having moved into a studio apartment in Mossley in April 2001. We are asked if we could estimate the price would likely be to prolong the lease by a further 90 years. Comparative properties in Mossley with an extended lease were in the region of £260,000. The average ground rent payable was £50 billed yearly. The lease ended on 21 June 2098. Considering the 72 years left we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of professional charges.