The nearer a domestic lease in Cheddar gets to zero years unexpired, the more it reduces the value of the property. If the residual term has, over 100 years to run then this decrease may be negligible nevertheless there will become a point in time when a lease has less than eighty years unexpired as part of the premium you will incur is what is termed as a marriage value. This could increase markedly the cost. It is the main logic behind why you should extend the lease without delay. Most flat owners in Cheddar will qualify for this right; however a conveyancer should be able to confirm whether you qualify for a lease extension. In certain situations you may not qualify, the most common reason being that you have owned the property for less than two years.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide you better control over the value of your Cheddar leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Last Winter Joseph, came critically near to the eighty-year threshold with the lease on his purpose- built apartment in Cheddar. In buying his flat twenty years ago, the length of the lease was of little interest. Fortunately, he noticed he needed to take action soon on Extending the lease. Joseph was able to extend his lease at the eleventh hour in August. Joseph and the landlord subsequently settled on the final figure of £6,000 . If he failed to meet the deadline, the figure would have increased by a minimum £850.
In 2014 we were e-mailed by Mrs Rachael Norbert who, having purchased a studio flat in Cheddar in March 2011. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to prolong the lease by a further 90 years. Similar premises in Cheddar with a long lease were valued about £168,800. The average amount of ground rent was £60 billed per annum. The lease expired in 2081. Given that there were 55 years left we estimated the compensation to the landlord for the lease extension to be within £31,400 and £36,200 exclusive of legals.
Last month we were called by Mr U González , who was assigned a lease of a ground floor flat in Cheddar in March 2006. The dilemma was if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Identical premises in Cheddar with a long lease were in the region of £235,200. The average ground rent payable was £45 invoiced yearly. The lease ran out on 7 April 2092. Taking into account 66 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of legals.