Unfortunately that a Bishops Cleeve residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Bishops Cleeve property prices.Once your lease nears 85ish years, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls below 80 years - otherwise a higher premium will be due. Most leasehold owners in Bishops Cleeve will be able to extend under the legislation; however a conveyancer will be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the process.
Leasehold properties in Bishops Cleeve with in excess of one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Bishops Cleeve,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Bishops Cleeve valuers.
Rory owned a studio flat in Bishops Cleeve being sold with a lease of a few days over 72 years remaining. Rory on an informal basis spoke with his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £125 annually. Ordinarily, ground rent would not be due on a lease extension were Rory to invoke his statutory right. Rory procured expert legal guidance and was able to make a more informed judgement and handle with the matter and sell the property.
In 2014 we were phoned by Dr O Alexander who, having moved into a basement apartment in Bishops Cleeve in March 2008. We are asked if we could shed any light on how much (roughly) price could be for a 90 year lease extension. Comparable properties in Bishops Cleeve with an extended lease were in the region of £200,000. The mid-range amount of ground rent was £50 billed per annum. The lease ran out in 2103. Considering the 77 years remaining we calculated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 plus legals.
Mr and Mrs. D Scott bought a one bedroom flat in Bishops Cleeve in January 2005. The question was if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Comparable properties in Bishops Cleeve with a long lease were valued about £260,200. The mid-range amount of ground rent was £65 collected annually. The lease ran out in 2092. Considering the 66 years as a residual term we estimated the compensation to the landlord to extend the lease to be between £16,200 and £18,600 plus costs.