Mancot 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 gets more expensive. Legislation has been in place for sometime now which entitles qualifying Mancot residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Mancot you should check if your lease has between 70 and ninety years left. There are compelling reasons why a Mancot leaseholder with a lease having around eighty years remaining should take action to ensure that a lease extension is put in place without delay
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years unexpired, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord 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.
In 2014 Jude, started to get close to the 80-year mark with the lease on his two bedroom flat in Mancot. Having purchased his property 19 years ago, the lease term was of little concern. Fortunately, he realised he would soon be paying way over the odds for a lease extension. Jude extended the lease just under the wire in May. Jude and the landlord who owned the flat above ultimately agreed on a premium of £6,000 . If the lease had gone below eighty years, the amount would have escalated by at least £1,100.
Mr and Mrs. C Scott moved into a garden flat in Mancot in March 2004. The dilemma was if we could shed any light on how much (roughly) premium would be to extend the lease by ninety years. Identical flats in Mancot with 100 year plus lease were in the region of £205,000. The average ground rent payable was £50 billed every twelve months. The lease came to a finish on 8 October 2104. Considering the 78 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £7,600 and £8,800 not including fees.
Last October we were called by Mr Milo Brooks , who acquired a garden flat in Mancot in August 2002. We are asked if we could estimate the price could be to prolong the lease by an additional years. Comparable homes in Mancot with 100 year plus lease were valued about £267,600. The mid-range amount of ground rent was £65 collected annually. The lease expired on 12 June 2093. Taking into account 67 years as a residual term we calculated the premium to the landlord to extend the lease to be between £14,300 and £16,400 exclusive of expenses.