With a domestic leasehold premises in Bishops Cleeve, you are in fact renting it for a certain period of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you should consider extending the lease sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive particularly when there are less than 80 years remaining. Leasehold owners in Bishops Cleeve with a lease approaching 81 years remaining should seriously consider extending it without delay. When the lease term has fewer than eighty years outstanding, under the relevant Act the freeholder can calculate and levy a greater amount, assessed on a technical calculation, strangely termed as “marriage value” which is due.
Leasehold properties in Bishops Cleeve with in excess of one hundred years left 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 estate 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service will provide you better control over the value of your Bishops Cleeve leasehold, as your property will be more valuable and saleable in relation to the 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.
In 2014 Aiden, came critically close to the 80-year threshold with the lease on his two bedroom flat in Bishops Cleeve. In buying his home 19 years previously, the lease term was of no bearing. Luckily, he became aware that he would imminently be paying way over the odds for a lease extension. Aiden extended the lease just ahead of time in April. Aiden and the freeholder via the managing agents ultimately agreed on an amount of £5,500 . If the lease had gone below 80 years, the price would have escalated by a minimum £975.
In 2010 we were approached by Ms S Davies who, having was assigned a lease of a basement apartment in Bishops Cleeve in February 1996. We are asked if we could estimate the price would be for a ninety year extension to my lease. Identical flats in Bishops Cleeve with 100 year plus lease were worth £181,600. The average ground rent payable was £55 collected annually. The lease lapsed on 13 June 2077. Given that there were 52 years remaining we approximated the compensation to the landlord to extend the lease to be within £30,400 and £35,200 plus fees.
In 2012 we were called by Dr D Roberts who, having owned a basement apartment in Bishops Cleeve in March 2009. We are asked if we could approximate the price would likely be to extend the lease by a further 90 years. Identical residencies in Bishops Cleeve with an extended lease were worth £290,000. The mid-range amount of ground rent was £45 invoiced every twelve months. The lease finished in 2097. Taking into account 72 years left we calculated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 plus expenses.