The nearer a residential lease in Cheddar gets to zero years unexpired, the more it reduces the value of the property. If the lease has, in excess of 99 years to run then this decrease may be of little impact nevertheless there will become a stage when a lease has under than 80 years left as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main logic behind why you should consider extending without delay. Many flat owners in Cheddar will qualify for this right; however a lawyer can advise whether you qualify to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
Leasehold premises in Cheddar with in excess of 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
The lawyers that we work with undertake Cheddar 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.
Aarav owned a 2 bedroom apartment in Cheddar on the market with a lease of a little over sixty years outstanding. Aarav on an informal basis spoke with his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Aarav to exercise his statutory right. Aarav obtained expert advice and secured satisfactory deal without going to tribunal and ending up with a market value flat.
Mr Owen Bernard owned a garden apartment in Cheddar in February 1995. We are asked if we could estimate the premium would be to extend the lease by ninety years. Comparative premises in Cheddar with a long lease were valued around £265,000. The average amount of ground rent was £55 invoiced quarterly. The lease elapsed in 2099. Having 74 years left we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 not including fees.
In 2011 we were called by Dr Omar Phillips who, having acquired a first floor flat in Cheddar in February 2011. The dilemma was if we could estimate the premium would likely be to prolong the lease by an additional years. Identical premises in Cheddar with an extended lease were in the region of £166,400. The average amount of ground rent was £60 billed yearly. The lease finished on 4 October 2079. Given that there were 54 years unexpired we estimated the premium to the freeholder for the lease extension to be within £32,300 and £37,400 plus professional charges.