Mancot leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Mancot tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Mancot you should investigate if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Mancot with more than one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
Irrespective of whether you are a tenant or a freeholder in Mancot,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Mancot valuers.
Subsequent to unsuccessful discussions with the freeholder of her basement apartment in Mancot, Grace initiated the lease extension process just as her lease was nearing the critical 80-year mark. The lease extension completed in August 2013. The landlord’s charges were negotiated to less than 550 pounds.
Mr and Mrs. P Cooper was assigned a lease of a purpose-built flat in Mancot in November 1997. The dilemma was if we could shed any light on how much (roughly) premium could be to extend the lease by ninety years. Identical homes in Mancot with 100 year plus lease were valued about £174,200. The mid-range ground rent payable was £55 invoiced yearly. The lease terminated on 15 September 2076. Considering the 51 years left we approximated the compensation to the freeholder to extend the lease to be between £31,400 and £36,200 not including fees.
In 2014 we were approached by Dr John Gunderson who, having purchased a basement apartment in Mancot in July 2004. We are asked if we could approximate the premium would be to extend the lease by ninety years. Similar premises in Mancot with a long lease were in the region of £285,000. The mid-range amount of ground rent was £45 billed quarterly. The lease elapsed on 21 October 2096. Considering the 71 years remaining we calculated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of legals.