Cheltenham Lease Extension - Free Consultation

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Why you should commence your Cheltenham lease extension


Top reasons for lease extension now:

Increase your lease and increase your Cheltenham property value

The value of Cheltenham leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase significantly once the remaining term is below than eighty years

Cheltenham property with a lease extension is almost the same value as a freehold

Leasehold residencies in Cheltenham with more than 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 buying the reversionary interest unless savings on ground rent and service charges warrant it.

Lenders may decide not to loan monies with a short lease

Lenders are really restricting their approach as regards to properties in Cheltenham with short leases. For instance you may find that their lending criteria are stricter and that they alter interest rates depending on how many years are left on the lease. Some may even refuse to lend completely, so if you wanted to sell, your only options would be to find a cash buyer, or hope for the best at auction thus limiting the number of potential purchasers.

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.
Halifax Minimum 70 years from the date of the mortgage.
TSB Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.

What makes us experts in Cheltenham lease extensions?

The lawyers that we work with procure Cheltenham 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.

Cheltenham Lease Extension Case Studies:

Jason, Cheltenham, Gloucestershire,

Jason was the the leasehold proprietor of a 2 bedroom flat in Cheltenham on the market with a lease of fraction over 59 years outstanding. Jason on an informal basis spoke with his landlord being a well known local-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 a new rent initially set at £200 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Jason to exercise his statutory right. Jason obtained expert advice and secured satisfactory deal informally and readily saleable.

Cheltenham case:

Mrs Lily Gray acquired a garden flat in Cheltenham in January 2002. The dilemma was if we could estimate the premium could be to prolong the lease by an additional years. Similar properties in Cheltenham with an extended lease were worth £186,000. The average amount of ground rent was £65 collected quarterly. The lease lapsed on 10 August 2082. Considering the 58 years left we approximated the premium to the freeholder for the lease extension to be between £24,700 and £28,600 plus professional charges.

Cheltenham case:

In 2010 we were e-mailed by Mr and Mrs. M Rivera who, having owned a first floor flat in Cheltenham in November 2009. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Similar residencies in Cheltenham with a long lease were valued around £250,000. The average ground rent payable was £50 billed quarterly. The lease terminated in 2093. Considering the 69 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 plus fees.