For anyone whose Cheltenham flat is held on a long lease, the message is clear – if no remedial action is taken, your property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more expensive it will be to obtain a lease extension.
Leasehold premises in Cheltenham with more than 100 years outstanding 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 situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
Lease extensions in Cheltenham can be a difficult process. We recommend you procure guidance from a conveyancing solicitor and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Cheltenham lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Adam owned a conversion flat in Cheltenham on the market with a lease of just over sixty years left. Adam on an informal basis approached his freeholder a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £50 yearly. Ordinarily, ground rent would not be payable on a lease extension were Adam to exercise his statutory right. Adam procured expert legal guidance and was able to make an informed decision and deal with the matter and readily saleable.
In 2009 we were contacted by Ms N Carter who, having completed a purpose-built flat in Cheltenham in April 2003. The dilemma was if we could estimate the price would be for a 90 year extension to my lease. Similar homes in Cheltenham with 100 year plus lease were worth £215,600. The average ground rent payable was £45 invoiced per annum. The lease terminated in 2088. Taking into account 62 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £18,100 and £20,800 plus legals.
Dr K François bought a basement flat in Cheltenham in July 1997. We are asked if we could shed any light on how much (approximately) premium could be to prolong the lease by 90 years. Similar homes in Cheltenham with an extended lease were worth £265,000. The mid-range ground rent payable was £50 invoiced monthly. The lease elapsed in 2099. Given that there were 73 years outstanding we calculated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including fees.