For those whose Cotswolds property is held on a long lease, the message is clear – if nothing is done, the property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to extend the lease.
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years unexpired, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide you increased control over the value of your Cotswolds leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Charlie was the the leasehold proprietor of a 2 bedroom flat in Cotswolds on the market with a lease of just over 61 years unexpired. Charlie informally contacted his freeholder a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £125 per annum. No ground rent would be due on a lease extension were Charlie to invoke his statutory right. Charlie obtained expert legal guidance and secured an acceptable deal without going to tribunal and readily saleable.
In 2011 we were approached by Dr I Clarke who, having completed a ground floor flat in Cotswolds in August 2010. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year extension to my lease. Comparative properties in Cotswolds with a long lease were valued about £264,000. The average amount of ground rent was £60 invoiced annually. The lease concluded on 13 July 2078. Taking into account 53 years remaining we approximated the premium to the landlord to extend the lease to be within £37,100 and £42,800 plus professional charges.
In 2011 we were e-mailed by Mr and Mrs. P Roberts who, having acquired a basement flat in Cotswolds in January 1997. The dilemma was if we could shed any light on how much (approximately) price would likely be for a ninety year extension to my lease. Similar premises in Cotswolds with a long lease were worth £225,400. The average amount of ground rent was £45 invoiced annually. The lease concluded on 4 April 2089. Taking into account 64 years remaining we estimated the premium to the freeholder for the lease extension to be within £16,200 and £18,600 plus expenses.