If you are facing a significant premium because your lease in Mousehole has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Main reasons to start your Mousehole lease extension today:
Increase your lease and increase your Mousehole property value
The re-sale value of a leasehold property in Mousehole depends on how many years the lease has left to run. If it is close to or fewer than 80 years you should anticipate problems on re-sale, so it is advisable to arrange for a lease extension before buying. Ideally one should start the process of extending the lease is when the lease still has 82 years remaining so that formalities can be finalised well before the 80 year mark. Current legislation entitles Mousehole qualifying lessees to acquire a lease extension of 90 years on top of the remaining lease term at a peppercorn rent (that is, rent free). The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Mousehole property with a lease extension has roughly the same value as a freehold
Leasehold properties in Mousehole with in excess of one hundred years unexpired 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 home. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges justify it.
Lenders may not finance a property on a short lease
Lenders do not like short residential leases. You most probably experience difficulties where you want to sell your flat in Mousehole if the remaining term of your lease is below the criteria set by most lenders. Different lenders have different requirements but on the whole they are looking for a minimum remaining lease term of seventy years.
| Lender |
Requirement
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|---|
| 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.
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| 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.
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| Nationwide Building Society |
- Our minimum unexpired lease term is 55 years, except where lending is over 85% of the purchase price/valuation on a second hand flat, in which case our minimum unexpired term is 90 years.
- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- 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
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
- Where lending is over 85% of the purchase price/valuation on a second hand flat and the unexpired lease term on the offer is 90 years or more - only advise us if the actual lease term is less than 90 years.
New build property:
- 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)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
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.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 55 years
- Unexpired lease term less than 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- 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
- Ground Rent is compounded RPI
- Ground Rent review period is less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 55 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial, etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years (Minimum 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat)
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (Will be declined)
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house (does not apply to Shared Ownership)
- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- 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
- A lease subject to a peppercorn Ground Rent (Annual Rent) charges
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.
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- 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?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years.
Lease Extensions 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 a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
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.
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| Virgin |
85 years at the time of completion. If it's less, we require it to be extended on or before completion.
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| 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.
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Why use us for your lease extension in Mousehole?
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 relation to the lease length should you wish to sell.
The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Mousehole Lease Extension Example Cases:
Natasha, Mousehole, Cornwall,
In the wake of eight months of lengthy correspondence with the landlord of her basement flat in Mousehole, Natasha started the lease extension process just as the lease was nearing the all-important eighty-year threshold. The legal work completed in January 2014. The landlord’s charges were negotiated to about four hundred GBP.
Mousehole case:
Last June we were phoned by Mr and Mrs. I Robinson , who
owned a one bedroom flat in Mousehole in March 2009. The question was if we could estimate the price could be for a 90 year lease extension. Comparable homes in Mousehole with an extended lease were in the region of £166,400. The average amount of ground rent was £60 invoiced quarterly. The lease lapsed in 2080. Given that there were 54 years remaining we estimated the premium to the freeholder to extend the lease to be between £32,300 and £37,400 plus professional charges.
Mousehole case:
Last year we were contacted by Mrs Morgan Morel , who
bought a basement flat in Mousehole in January 1995. We are asked if we could estimate the premium could be to prolong the lease by an additional years. Comparative homes in Mousehole with a long lease were in the region of £227,800. The mid-range amount of ground rent was £45 invoiced per annum. The lease ended in 2091. Taking into account 65 years outstanding we calculated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 not including legals.