Cotswolds leases on domestic deteriorating in value. Where your lease has approximately 90 years remaining, you should start considering the need for a lease extension. An important point to note is that it is desirable for a lease extension to take place before the term of the existing lease falls under eighty years - otherwise a higher amount will be payable. Leasehold owners in Cotswolds will usually qualify for a lease extension; however it’s a good idea to check with a conveyancing solicitor to check if you qualify. In certain situations you may not qualify. There are also strict deadlines and formalities to comply with once the process is initiated so it’s best to be guided by a conveyancer during the process.
It is generally accepted that a residential leasehold with in excess of 100 years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the residence 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. |
| 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; |
| Coventry Building Society | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Using our service gives you better control over the value of your Cotswolds leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Tyler owned a 2 bedroom apartment in Cotswolds being sold with a lease of a little over sixty years unexpired. Tyler on an informal basis spoke with his freeholder being a well known London-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 annually. Ordinarily, ground rent would not be payable on a lease extension were Tyler to invoke his statutory right. Tyler procured expert legal guidance and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
In 2012 we were contacted by Mr and Mrs. B Ward who, having owned a studio apartment in Cotswolds in January 1998. The question was if we could approximate the premium would likely be for a 90 year lease extension. Similar flats in Cotswolds with an extended lease were in the region of £183,600. The average ground rent payable was £65 collected yearly. The lease came to a finish in 2082. Given that there were 57 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £28,500 and £33,000 plus expenses.
Mr O Rodríguez took over the lease of a first floor flat in Cotswolds in April 2003. The dilemma was if we could estimate the price could be to extend the lease by a further 90 years. Comparative premises in Cotswolds with a long lease were valued around £245,000. The mid-range amount of ground rent was £50 collected annually. The lease finished on 5 January 2093. Given that there were 68 years remaining we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of costs.