Owning a apartment usually means owning a lease of the property, which has a finite term of years. This lease will normally be granted for a fixed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Bishops Cleeve. Inevitably, the period of lease remaining reduces as time goes by. This is often overlooked and only becomes a problem when the flat or house has to be sold or refinanced. The shorter the lease the less it is worth and the more expensive it will be to extend the lease. Eligible leaseholders in Bishops Cleeve have the legal entitlement to extend the lease for a further ninety years in accordance with the 1993 Leasehold Reform Act. Please give due consideration before putting off your Bishops Cleeve lease extension. Putting off the cost now only increases the price you will eventually incur to extend your lease
Leasehold properties in Bishops Cleeve with over 100 years outstanding 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 situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Godiva Mortgages | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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 |
The conveyancers that we work with handle Bishops Cleeve lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Daniel owned a studio flat in Bishops Cleeve being marketed with a lease of a few days over 61 years unexpired. Daniel on an informal basis approached his landlord being a well known Bristol-based freehold company for a lease extension. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 per annum. No ground rent would be payable on a lease extension were Daniel to exercise his statutory right. Daniel procured expert legal guidance and secured an acceptable resolution informally and sell the flat.
Dr Ashleigh Morris owned a recently refurbished apartment in Bishops Cleeve in July 2006. We are asked if we could shed any light on how much (approximately) price would likely be for a 90 year lease extension. Identical premises in Bishops Cleeve with 100 year plus lease were worth £230,800. The average amount of ground rent was £60 invoiced monthly. The lease came to a finish on 8 November 2085. Given that there were 60 years left we calculated the compensation to the freeholder for the lease extension to be within £24,700 and £28,600 not including professional charges.
In 2009 we were phoned by Mr and Mrs. E Murphy who, having was assigned a lease of a first floor apartment in Bishops Cleeve in September 2001. We are asked if we could shed any light on how much (roughly) premium could be to extend the lease by 90 years. Identical properties in Bishops Cleeve with 100 year plus lease were in the region of £166,800. The mid-range amount of ground rent was £50 collected quarterly. The lease expired in 2075. Considering the 50 years unexpired we estimated the premium to the landlord for the lease extension to be between £32,300 and £37,400 plus legals.