When it comes to long leasehold premises in Cheltenham, you effectively rent it for a certain period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should think about extending the lease sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease becomes disproportionately greater especially once there are less than 80 years remaining. Residents in Cheltenham with a lease drawing near to 81 years left should seriously think of extending it sooner than later. When a lease has under 80 years remaining, under the relevant statute the landlord can calculate and charge a greater premium, assessed on a technical calculation, strangely termed as “marriage value” which is payable.
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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 be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Yorkshire 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. |
Using our service will provide you enhanced control over the value of your Cheltenham leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of unsuccessful discussions with the landlord of her two bedroom apartment in Cheltenham, Chloe commenced the lease extension process as the 80 year threshold was fast advancing. The legal work was concluded in March 2008. The freeholder’s costs were kept to an absolute minimum.
In 2011 we were approached by Dr L White who, having completed a one bedroom apartment in Cheltenham in October 2007. The question was if we could shed any light on how much (roughly) price could be to prolong the lease by 90 years. Comparable premises in Cheltenham with a long lease were worth £270,000. The mid-range amount of ground rent was £55 billed monthly. The lease ran out on 23 April 2100. Given that there were 74 years unexpired we approximated the premium to the landlord to extend the lease to be within £9,500 and £11,000 not including expenses.
Last Christmas we were e-mailed by Mr Owen Pérez , who completed a ground floor flat in Cheltenham in November 1995. We are asked if we could approximate the price would be to prolong the lease by a further 90 years. Identical homes in Cheltenham with 100 year plus lease were worth £166,400. The mid-range amount of ground rent was £60 billed annually. The lease end date was in 2080. Considering the 54 years remaining we calculated the premium to the freeholder for the lease extension to be between £32,300 and £37,400 exclusive of professional charges.