When it comes to residential leasehold premises in Mossley, you are in fact renting it for a certain amount of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you may consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease becomes disproportionately more expensive especially once there are less than eighty years remaining. Residents in Mossley with a lease approaching 81 years remaining should seriously consider extending it as soon as possible. When a lease has below eighty years left, under the relevant Act the landlord can calculate and demand a greater premium, based on a technical multiplication, known as “marriage value” which is payable.
It is generally considered that a residential leasehold with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
Using our service will provide you better control over the value of your Mossley leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Ethan, started to get close to the eighty-year threshold with the lease on his ground floor flat in Mossley. In buying his flat two decades ago, the unexpired term was of little significance. As luck would have it, he noticed he needed to take steps soon on a lease extension. Ethan was able to extend his lease just under the wire last June. Ethan and the freeholder via the management company subsequently settled on an amount of £5,000 . If the lease had fallen below 80 years, the amount would have escalated by at least £1,100.
In 2013 we were phoned by Dr E Bernard who, having acquired a garden apartment in Mossley in September 2000. We are asked if we could approximate the premium would likely be for a 90 year lease extension. Comparative premises in Mossley with an extended lease were worth £173,800. The mid-range amount of ground rent was £60 billed yearly. The lease finished on 1 February 2080. Given that there were 55 years unexpired we estimated the premium to the landlord to extend the lease to be between £31,400 and £36,200 exclusive of costs.
Dr B Turner purchased a one bedroom flat in Mossley in September 2003. The dilemma was if we could estimate the price could be to extend the lease by a further 90 years. Similar flats in Mossley with 100 year plus lease were worth £235,200. The average amount of ground rent was £45 billed per annum. The lease elapsed on 17 August 2091. Having 66 years unexpired we estimated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 plus costs.