Cowley residential property owned on a long lease is a wasting asset because a leaseholder only owns the property for a set term.
Leasehold properties in Cowley with over one hundred years outstanding on the lease are often referred to as ‘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 reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service gives you better control over the value of your Cowley leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Harvey, started to get close to the eighty-year mark with the lease on his first floor apartment in Cowley. Having purchased his property 18 years previously, the unexpired term was of minimal interest. Fortunately, he noticed he would imminently be paying an escalated premium for Extending the lease. Harvey was able to extend his lease just under the wire in January. Harvey and the freeholder via the managing agents eventually agreed on the final figure of £6,000 . If he not met the deadline, the amount would have escalated by at least £1,150.
Last Winter we were e-mailed by Ms Shannon Bonnet , who acquired a one bedroom flat in Cowley in August 1999. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Comparable flats in Cowley with an extended lease were valued about £280,000. The mid-range ground rent payable was £45 invoiced yearly. The lease end date was on 11 June 2093. Given that there were 69 years remaining we estimated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 exclusive of legals.
An example of a Freehold Enfranchisement decision for a Cowley property is 164 Nestles Avenue in October 2013. The tribunal agreed with the proposed price of £20,158 for the freehold and determined that that sum is the amount to be paid into court This case affected 2 flats. The unexpired residue of the current lease was 69 years.