It’s a harsh truth that a Cotham residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Cotham property prices.Where your lease has approximately 90 years left, you should 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 under 80 years - otherwise a higher amount will be payable. Most flat owners in Cotham will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer for the duration of the formalities.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the residence will be equivalent in value to a freehold for many years ahead.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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 |
| 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 lawyers that we work with handle Cotham 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.
Following unsuccessful discussions with the landlord of her ground floor apartment in Cotham, Alice initiated the lease extension process just as the lease was nearing the critical eighty-year mark. The lease extension was finalised in November 2007. The freeholder’s charges were kept to an absolute minimum.
In 2012 we were contacted by Mrs F James who, having acquired a newly refurbished flat in Cotham in March 1997. The dilemma was if we could estimate the premium would likely be to prolong the lease by an additional years. Comparative residencies in Cotham with a long lease were in the region of £256,600. The average amount of ground rent was £60 invoiced annually. The lease expired on 2 March 2077. Given that there were 52 years unexpired we approximated the compensation to the landlord to extend the lease to be within £41,800 and £48,400 not including costs.
In 2014 we were e-mailed by Mr Freddie Howard who, having took over the lease of a purpose-built apartment in Cotham in July 1999. We are asked if we could estimate the price could be to prolong the lease by an additional years. Identical residencies in Cotham with an extended lease were worth £218,000. The mid-range ground rent payable was £45 invoiced monthly. The lease expired on 22 August 2088. Taking into account 63 years outstanding we estimated the premium to the freeholder to extend the lease to be between £17,100 and £19,800 exclusive of costs.