Moston leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Moston residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Moston you would be well advised to see if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Moston with in excess of 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges justify it.
| 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Yorkshire 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. |
Irrespective of whether you are a tenant or a landlord in Moston,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Moston valuers.
Seth was the the leasehold owner of a studio apartment in Moston being marketed with a lease of a few days over fifty eight years left. Seth informally contacted his landlord a well known London-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 yearly. No ground rent would be payable on a lease extension were Seth to invoke his statutory right. Seth procured expert legal guidance and secured an acceptable deal without going to tribunal and ending up with a market value flat.
In 2009 we were phoned by Dr E Gómez who, having purchased a one bedroom flat in Moston in November 2007. The dilemma was if we could approximate the price would likely be for a 90 year lease extension. Comparative flats in Moston with a long lease were worth £198,800. The mid-range amount of ground rent was £55 collected monthly. The lease expiry date was in 2081. Given that there were 55 years left we approximated the compensation to the landlord to extend the lease to be within £33,300 and £38,400 exclusive of legals.
In 2014 we were contacted by Ms J André who, having moved into a one bedroom flat in Moston in March 2003. We are asked if we could estimate the premium would be to extend the lease by an additional years. Comparable properties in Moston with an extended lease were valued about £295,000. The average ground rent payable was £50 billed annually. The lease expired on 8 January 2101. Taking into account 75 years left we approximated the premium to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of expenses.