The rule of thumb is, all other things holding equal, the shorter the lease the more costly the premium. Qualifying leaseholders in Cheltenham have the right to extend the lease for a further 90 years in accordance with the 1993 Leasehold Reform Act. Do think carefully before delaying your Cheltenham lease extension. Putting off that expense today simply increases the amount you will eventually be required to pay to extend the lease.
It is generally accepted that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years left, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors 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 lawyer we work with provide it.
Blake owned a 2 bedroom flat in Cheltenham on the market with a lease of a little over sixty years unexpired. Blake informally contacted his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £50 annually. No ground rent would be due on a lease extension were Blake to exercise his statutory right. Blake procured expert advice and secured an acceptable deal informally and ending up with a market value flat.
Dr Harriet Torres completed a garden flat in Cheltenham in October 2010. We are asked if we could estimate the price would be for a 90 year lease extension. Comparative residencies in Cheltenham with 100 year plus lease were valued about £250,000. The mid-range ground rent payable was £50 invoiced quarterly. The lease came to a finish on 11 August 2095. Taking into account 70 years remaining we estimated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 plus costs.
In 2013 we were phoned by Mr and Mrs. H Alexander who, having completed a ground floor apartment in Cheltenham in July 2004. The question was if we could estimate the compensation to the landlord could be for a ninety year lease extension. Comparable residencies in Cheltenham with 100 year plus lease were valued about £290,000. The mid-range ground rent payable was £60 collected annually. The lease concluded on 21 February 2105. Taking into account 80 years left we approximated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 exclusive of legals.