Cheddar leases on residential deteriorating in value. if your lease has approximately ninety years left, you should start considering the need for a lease extension. Eighty years is a significant number: when the unexpired term of a lease falls below this level then you begin paying an additional element called marriage value. Leasehold owners in Cheddar will usually qualify for a lease extension; however it’s a good idea to check with a conveyancer to check if you qualify. In some situations you may not be entitled. There are also strict deadlines and steps to follow once the process has started so it’s prudent to be guided by a lawyer during the process.
It is generally considered that a property with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years left, the residence will be worth the same as a freehold for many years in the future.
| 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; |
| Coventry Building Society | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
The lawyers that we work with procure 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 conveyancer we work with provide it.
Off the back of protracted correspondence with the landlord of her garden apartment in Cheddar, Sophie commenced the lease extension process as the 80 year deadline was fast advancing. The lease extension was finalised in January 2008. The freeholder’s costs were restricted to less than 600 GBP.
In 2014 we were called by Dr Elijah Gray who, having bought a garden flat in Cheddar in July 1995. The question was if we could shed any light on how much (approximately) premium could be for a ninety year lease extension. Comparable properties in Cheddar with a long lease were valued about £260,000. The average amount of ground rent was £50 collected per annum. The lease expired on 18 July 2098. Having 72 years outstanding we calculated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including expenses.
In 2011 we were approached by Mr and Mrs. S Norbert who, having owned a newly refurbished flat in Cheddar in May 1998. The question was if we could approximate the premium would likely be for a 90 year lease extension. Comparative properties in Cheddar with 100 year plus lease were worth £256,600. The average ground rent payable was £60 billed per annum. The lease ended in 2078. Having 52 years unexpired we estimated the compensation to the landlord for the lease extension to be within £39,000 and £45,000 plus expenses.