Owning a flat usually means owning a lease of the property, which has a set term of years. The lease will normally be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Mousehole. Clearly, the length of lease remaining reduces as time goes by. This is often overlooked and only becomes a problem when the flat or house has to be disposed of or refinanced. The shorter the lease the lower the value of the property and the more expensive it will be to obtain a lease extension. Eligible leaseholders in Mousehole have the legal entitlement to extend the lease for an additional ninety years in accordance with the 1993 Leasehold Reform Act. Do give careful deliberation before delaying your Mousehole lease extension. Putting off the cost now only increases the price you will eventually have to pay for a lease extension
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Mousehole,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Mousehole valuers.
Matthew was the the leasehold proprietor of a 2 bedroom apartment in Mousehole on the market with a lease of just over fifty eight years remaining. Matthew informally spoke with his landlord a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Matthew to exercise his statutory right. Matthew obtained expert legal guidance and was able to make an informed decision and handle with the matter and sell the property.
In 2013 we were contacted by Mr and Mrs. S Ali who, having moved into a basement apartment in Mousehole in September 2009. The question was if we could shed any light on how much (approximately) premium would be for a 90 year lease extension. Similar residencies in Mousehole with a long lease were worth £254,200. The average ground rent payable was £60 collected annually. The lease elapsed in 2076. Given that there were 51 years remaining we calculated the compensation to the freeholder for the lease extension to be between £43,700 and £50,600 plus professional charges.
In 2011 we were e-mailed by Dr K Flores who, having owned a garden flat in Mousehole in September 1999. We are asked if we could shed any light on how much (approximately) price could be to extend the lease by an additional years. Identical residencies in Mousehole with 100 year plus lease were in the region of £215,600. The average ground rent payable was £45 collected monthly. The lease concluded in 2087. Given that there were 62 years left we estimated the compensation to the landlord to extend the lease to be between £18,100 and £20,800 plus costs.