For anyone whose Mousehole property is held on a long lease, the message is clear – if no remedial action is taken, the property will eventually revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more it will cost to procure a lease extension.
Leasehold properties in Mousehole with over one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Retaining our service will provide you enhanced control over the value of your Mousehole leasehold, as your property will be more valuable and saleable in respect of 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.
After unsuccessful discussions with the landlord of her leasehold apartment in Mousehole, Charlotte commenced the lease extension process just as her lease was nearing the critical eighty-year deadline. The legal work completed in October 2008. The landlord’s charges were negotiated to approximately 500 pounds.
In 2010 we were approached by Dr Sian Edwards who, having was assigned a lease of a garden flat in Mousehole in October 2003. The dilemma was if we could approximate the premium would be for a ninety year extension to my lease. Identical homes in Mousehole with 100 year plus lease were in the region of £270,000. The average ground rent payable was £55 billed per annum. The lease ended in 2101. Considering the 75 years unexpired we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 plus professional charges.
Ms W King bought a one bedroom flat in Mousehole in June 2010. We are asked if we could shed any light on how much (approximately) premium would be for a ninety year extension to my lease. Identical flats in Mousehole with 100 year plus lease were in the region of £173,800. The mid-range ground rent payable was £60 invoiced every twelve months. The lease terminated on 16 October 2081. Having 55 years as a residual term we approximated the premium to the landlord to extend the lease to be within £31,400 and £36,200 not including fees.