Moston leases on domestic properties are gradually losing value. if your lease has about 90 years remaining, you should start thinking about a lease extension. If lease term dips under 80 years, you will then have to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Flat owners in Moston will mostly qualify for a lease extension; however a solicitor will check if you qualify. In certain circumstances you may not be entitled. There are prescribed deadlines and procedures to follow once the process has commenced so it’s prudent to be guided by a conveyancer during the process.
It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence 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 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancers that we work with undertake Moston 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.
In recent months Adam, came very close to the 80-year threshold with the lease on his first floor apartment in Moston. In buying his flat two decades ago, the unexpired term was of no relevance. Luckily, he recognised he would soon be paying an escalated premium for Extending the lease. Adam arranged for a lease extension just under the wire in April. Adam and the freeholder subsequently settled on the final figure of £5,500 . If he not met the deadline, the premium would have become more costly by at least £875.
Mr and Mrs. I Lee completed a ground floor flat in Moston in May 1997. We are asked if we could approximate the premium would be for a 90 year lease extension. Identical homes in Moston with a long lease were in the region of £235,600. The average amount of ground rent was £60 billed yearly. The lease elapsed in 2087. Given that there were 62 years unexpired we calculated the premium to the freeholder to extend the lease to be between £21,900 and £25,200 not including legals.
In 2009 we were phoned by Mr Y Wright who, having completed a basement apartment in Moston in January 2007. The question was if we could estimate the premium would be for a ninety year lease extension. Identical residencies in Moston with 100 year plus lease were worth £174,200. The average amount of ground rent was £55 invoiced monthly. The lease came to a finish on 25 August 2076. Given that there were 51 years unexpired we calculated the compensation to the landlord to extend the lease to be within £31,400 and £36,200 plus fees.