Unfortunately that a Cheddar residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Cheddar property prices.Once your lease nears 85ish years, you should start thinking about a lease extension. If the number of years remaining dips under 80 years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Cheddar will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancer throughout the process.
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years left, the premises will be worth the same as a freehold for many years in the future.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date 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. |
Regardless of whether you are a tenant or a landlord in Cheddar,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Cheddar valuers.
Connor owned a conversion flat in Cheddar on the market with a lease of just over 59 years unexpired. Connor on an informal basis approached his freeholder being a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £125 per annum. Ordinarily, ground rent would not be payable on a lease extension were Connor to invoke his statutory right. Connor obtained expert legal guidance and secured an acceptable deal informally and sell the flat.
In 2009 we were contacted by Mr Tyler Sánchez who, having was assigned a lease of a first floor apartment in Cheddar in February 2009. We are asked if we could approximate the price could be for a 90 year lease extension. Similar flats in Cheddar with 100 year plus lease were worth £227,800. The mid-range ground rent payable was £45 collected monthly. The lease came to a finish in 2091. Having 65 years left we estimated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 exclusive of professional charges.
In 2014 we were approached by Ms F Girard who, having completed a one bedroom apartment in Cheddar in January 2012. The question was if we could shed any light on how much (approximately) price could be for a ninety year lease extension. Identical premises in Cheddar with 100 year plus lease were in the region of £275,000. The average ground rent payable was £55 billed monthly. The lease finished in 2102. Having 76 years outstanding we estimated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of fees.