Top reasons for Mousehole lease extension
<div class="lm-topic lm-topic-lender">
<p>
<h3>
Main reasons to commence your Mousehole lease extension today:
</h3>
<h4> A <a href="http://www.lendermonitor.com/conveyancing/loc/mousehole">Mousehole</a> lease depreciates with the years remaining on the lease.
</h4>
<p> Unfortunately that a Mousehole residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Mousehole property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under 80 years - otherwise a higher premium will be payable. The majority of flat owners in Mousehole will be able to extend under the legislation; however a lawyer will be able to confirm if you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor for the duration of the process.
<h4>Mousehole property with a lease extension is almost the same value as a freehold</h4>
<p>
Leasehold premises in Mousehole with over 100 years left on the lease are often 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 to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges justify it. <h4>Banks and Building Societies will not finance a property on a short lease</h4> Banks and building societies are distinct in their lending criteria. Some draw the line at 75 years remaining on the lease; others may be content with anything over 70 years. Below 60 years, it may be difficult to get a mortgage at all.
<p>
<div class="row">
<div class="col-sm-8">
<table class="table table-striped table-condensed">
<thead>
<tr><th>Lender</th>
<th> Requirement
</thead>
<tbody>
<tr>
<td>Godiva Mortgages</td>
<td> A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion.
</tr>
<tr>
<td>Halifax</td>
<td> Minimum 70 years from the date of the mortgage.
</tr>
<tr>
<td>TSB</td>
<td> Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.
</tr>
<tr>
<td>The Mortgage Works</td>
<td> Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term. <br />Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:<br /><br />Second hand property:<br />- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years <br />- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported<br />- For equity share applications - advise us if the actual lease term is different than reported on the offer<br /><br />New build property:<br />- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)<br />- For equity share applications - always advise us if the actual lease term is different than reported on the offer<br /><br />Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.<br /><br />SECOND HAND PROPERTIES<br /><br />Unacceptable - advise Issuing Office (Will be declined):<br />- Unexpired lease term less than 70 years<br />- Less than 30 years remaining at the end of the mortgage term<br />- Ground Rent greater than 0.5% of the property value<br />- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more<br />- Ground Rent is compounded RPI<br />- Ground Rent review period less than or equal to 5 years<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Unexpired lease term is 70 to 85 years<br />- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value<br />- Ground Rent escalation is linked to any indices greater than RPI<br />- Ground Rent escalation is linked to the value of the building*<br />- Ground Rent review period is greater than 5 and less than 10 years<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)<br />- Anything that appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office): <br />- Unexpired lease term greater than 85 years<br />- Ground Rent less than or equal to 0.1% of the property value<br />- Ground Rent review period greater than or equal to 10 years<br />- Ground Rent escalation less than or equal to RPI<br /><br />NEW BUILD PROPERTIES (includes office conversions)<br /><br />Unacceptable - advise Issuing Office (will be declined):<br />- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house <br />- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis<br />- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)<br />- Anything else appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office):<br />- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house <br />- A lease subject to a peppercorn ground rent (annual rent) charges <br /><br />For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance <br /><br />* Where the Ground Rent escalation is linked to the value of the building, please provide the following:<br />- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property? <br />- The current valuation and Ground Rent for each unit<br />- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?<br />- What is the right of appeal? And is this a documented process within the lease?<br />- Who bears the cost of the valuation (and appeal) process?<br />- Confirmation the review period is not less than twenty years<br /><br />LEASE EXTENSIONS<br /><br />We require all lease extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to the Issuing Office <br /><br />Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
</tr>
<tr>
<td>Royal Bank of Scotland</td>
<td> Mortgage term plus 30 years.
</tr>
</tbody>
</table>
</div>
</div>
<h4>
Why use us for your lease extension in Mousehole? </h4>
<p> Irrespective of whether you are a tenant or a landlord in Mousehole,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Mousehole valuers.
<h4>
Mousehole Lease Extension Case Summaries:
</h4>
<h5> Daniel, Mousehole, Cornwall,</h5>
<p>
Daniel owned a conversion flat in Mousehole on the market with a lease of a few days over sixty years outstanding. Daniel informally contacted his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to an increased rent to £50 per annum. No ground rent would be due on a lease extension were Daniel to exercise his statutory right. Daniel procured expert legal guidance and was able to make a more informed decision and deal with the matter and readily saleable.
<h5>Mousehole case:</h5>
<p>
Last Winter we were e-mailed by Dr M Turner , who
acquired a purpose-built flat in Mousehole in July 2011. The dilemma was if we could estimate the premium could be for a 90 year lease extension. Comparable properties in Mousehole with 100 year plus lease were valued around £225,400. The average amount of ground rent was £45 collected monthly. The lease expired in 2090. Given that there were 64 years left we approximated the compensation to the landlord to extend the lease to be between £15,200 and £17,600 not including fees.
<h5>Mousehole case:</h5>
<p> Mrs T Pérez acquired a one bedroom flat in Mousehole in June 2000. We are asked if we could approximate the price would be to extend the lease by a further 90 years. Comparative properties in Mousehole with a long lease were in the region of £270,000. The average amount of ground rent was £55 invoiced quarterly. The lease ran out on 5 November 2101. Considering the 75 years remaining we approximated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including legals.
</div>