Unfortunately that a Cheltenham residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Cheltenham property prices.Where your lease has approximately 90 years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls lower than eighty years - otherwise a higher premium will be due. The majority of flat owners in Cheltenham will be able to extend under the legislation; however a conveyancer will be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer throughout the process.
Leasehold residencies in Cheltenham with over one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and service charges merit it.
| 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. |
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Using our service gives you enhanced control over the value of your Cheltenham leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Ethan was the the leasehold proprietor of a studio flat in Cheltenham on the market with a lease of a few days over 61 years outstanding. Ethan on an informal basis approached his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £200 per annum. Ordinarily, ground rent would not be payable on a lease extension were Ethan to invoke his statutory right. Ethan obtained expert advice and secured an acceptable deal informally and readily saleable.
In 2009 we were e-mailed by Dr Jack Alexander who, having moved into a first floor flat in Cheltenham in September 2005. The dilemma was if we could approximate the compensation to the landlord would be for a 90 year lease extension. Comparable homes in Cheltenham with an extended lease were worth £173,800. The mid-range amount of ground rent was £65 collected quarterly. The lease finished in 2081. Given that there were 55 years left we approximated the compensation to the landlord to extend the lease to be within £31,400 and £36,200 exclusive of professional charges.
In 2013 we were e-mailed by Ms S Hall who, having bought a garden flat in Cheltenham in September 2011. The dilemma was if we could approximate the premium would be to prolong the lease by 90 years. Identical premises in Cheltenham with a long lease were worth £235,200. The mid-range ground rent payable was £45 collected per annum. The lease termination date was on 1 September 2092. Considering the 66 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 plus professional charges.