The value of Cheltenham leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate substantially once the remaining term is below than eighty years
Leasehold properties in Cheltenham with over 100 years left on the lease are sometimes referred to as ‘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 to be gained by purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
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.
After lengthy negotiations with the freeholder of her leasehold flat in Cheltenham, Megan started the lease extension process just as the lease was coming close to the crucial 80-year threshold. The lease extension was finalised in April 2008. The landlord’s charges were kept to an absolute minimum.
In 2009 we were contacted by Mr G Johnson who, having purchased a one bedroom flat in Cheltenham in October 1996. We are asked if we could estimate the premium would be to prolong the lease by an additional years. Comparative residencies in Cheltenham with an extended lease were valued around £285,000. The mid-range amount of ground rent was £55 collected annually. The lease elapsed in 2104. Considering the 79 years left we approximated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 exclusive of expenses.
In 2009 we were e-mailed by Mr and Mrs. E Williams who, having purchased a ground floor flat in Cheltenham in August 2007. The question was if we could approximate the compensation to the landlord would likely be to extend the lease by ninety years. Similar premises in Cheltenham with an extended lease were valued about £198,400. The average amount of ground rent was £65 collected quarterly. The lease expiry date was on 19 June 2084. Considering the 59 years unexpired we approximated the premium to the freeholder to extend the lease to be within £21,900 and £25,200 plus expenses.