Cheltenham leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Most owners of residential leasehold property in Cheltenham enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Cheltenham you should check if your lease has between seventy and ninety years left. There are compelling reasons why a Cheltenham leaseholder with a lease having around 80 years unexpired should take steps to make sure that a lease extension is effected without delay
Leasehold premises in Cheltenham with over 100 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 property. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date 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 |
| 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. |
Regardless of whether you are a tenant or a landlord in Cheltenham,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Cheltenham valuers.
16 months ago Hunter, came precariously close to the 80-year threshold with the lease on his purpose- built flat in Cheltenham. In buying his property two decades ago, the unexpired term was of little significance. Thankfully, it dawned on him that he needed to take action soon on Extending the lease. Hunter was able to extend his lease just under the wire in July. Hunter and the landlord who owned the flat above ultimately agreed on the final figure of £6,000 . If the lease had slipped below 80 years, the premium would have increased by a minimum £925.
Last Spring we were e-mailed by Mr and Mrs. G André , who took over the lease of a studio flat in Cheltenham in March 2012. We are asked if we could shed any light on how much (roughly) premium would be to extend the lease by ninety years. Comparative properties in Cheltenham with an extended lease were valued around £261,600. The average ground rent payable was £60 invoiced yearly. The lease expired on 7 April 2077. Considering the 52 years unexpired we calculated the premium to the landlord to extend the lease to be between £39,000 and £45,000 plus fees.
In 2012 we were approached by Mr A Ricardo who, having bought a garden flat in Cheltenham in May 2012. We are asked if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Comparative residencies in Cheltenham with 100 year plus lease were in the region of £218,000. The mid-range amount of ground rent was £45 billed yearly. The lease elapsed in 2088. Given that there were 63 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £17,100 and £19,800 not including fees.