Tewkesbury residential property owned on a long lease is a wasting asset because a leaseholder only owns the property for a set term.
Leasehold premises in Tewkesbury with in excess of 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Using our service gives you enhanced control over the value of your Tewkesbury leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Arthur, started to get near to the eighty-year mark with the lease on his purpose- built flat in Tewkesbury. Having purchased his flat two decades ago, the unexpired term was of little significance. Thankfully, he realised he needed to take steps soon on a lease extension. Arthur extended the lease just in the nick of time in January. Arthur and the freeholder in the end agreed on an amount of £6,000 . If the lease had dropped to less than 80 years, the premium would have gone up by at least £1,000.
Last Christmas we were approach by Mr S André , who completed a purpose-built apartment in Tewkesbury in September 2005. We are asked if we could estimate the premium would likely be to extend the lease by 90 years. Similar premises in Tewkesbury with 100 year plus lease were valued about £295,000. The mid-range amount of ground rent was £45 collected yearly. The lease finished on 13 June 2099. Given that there were 74 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of expenses.
In 2011 we were approached by Mrs J Ricardo who, having acquired a first floor flat in Tewkesbury in January 2004. We are asked if we could shed any light on how much (roughly) price would be for a 90 year lease extension. Comparative properties in Tewkesbury with 100 year plus lease were in the region of £243,000. The mid-range ground rent payable was £65 billed per annum. The lease termination date was on 11 June 2088. Given that there were 63 years unexpired we calculated the compensation to the landlord to extend the lease to be within £20,000 and £23,000 plus fees.