It’s a harsh truth that a Bourton on the Water residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Bourton on the Water property market.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 eighty years - otherwise a higher amount will be due. Most leasehold owners in Bourton on the Water will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you are eligibility. In some cases 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 throughout the formalities.
It is generally considered that a property with over 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 30 years left, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 Bourton on the Water 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 conveyancer we work with provide it.
After protracted discussions with the landlord of her garden flat in Bourton on the Water, Phoebe commenced the lease extension process just as her lease was nearing the all-important 80-year threshold. The legal work completed in May 2011. The freeholder’s fees were negotiated to approximately 650 GBP.
Last March we were approach by Mr and Mrs. R Walker , who took over the lease of a basement apartment in Bourton on the Water in January 2011. We are asked if we could approximate the price would be for a ninety year lease extension. Comparative homes in Bourton on the Water with a long lease were in the region of £280,000. The average ground rent payable was £55 collected yearly. The lease ran out in 2103. Considering the 78 years outstanding we calculated the premium to the landlord for the lease extension to be between £13,300 and £15,400 exclusive of fees.
Mr K Flores acquired a one bedroom apartment in Bourton on the Water in February 2001. We are asked if we could shed any light on how much (roughly) premium would likely be for a 90 year lease extension. Comparable homes in Bourton on the Water with a long lease were worth £186,000. The average ground rent payable was £65 invoiced quarterly. The lease came to a finish in 2083. Considering the 58 years left we approximated the premium to the freeholder for the lease extension to be within £24,700 and £28,600 not including fees.