Unfortunately that a Chipping Sodbury residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Chipping Sodbury property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If lease term slips below 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 extra value that a lease extension will add the property Most flat owners in Chipping Sodbury will be able to extend under the legislation; however a conveyancer will be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer throughout the formalities.
Leasehold residencies in Chipping Sodbury with more than one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a landlord in Chipping Sodbury,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Chipping Sodbury valuers.
Rory was the the leasehold proprietor of a 2 bedroom apartment in Chipping Sodbury on the market with a lease of a little over 59 years remaining. Rory on an informal basis approached his landlord a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Rory to invoke his statutory right. Rory procured expert legal guidance and was able to make an informed decision and deal with the matter and sell the flat.
Mr and Mrs. V Moreau moved into a one bedroom apartment in Chipping Sodbury in November 2005. We are asked if we could estimate the premium would likely be for a 90 year lease extension. Similar properties in Chipping Sodbury with an extended lease were valued around £290,000. The average amount of ground rent was £60 collected per annum. The lease came to a finish in 2105. Given that there were 80 years remaining we calculated the premium to the landlord for the lease extension to be between £13,300 and £15,400 plus professional charges.
Last Autumn we were e-mailed by Mr and Mrs. T Watson , who bought a basement apartment in Chipping Sodbury in July 2004. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year lease extension. Similar premises in Chipping Sodbury with an extended lease were in the region of £200,800. The mid-range amount of ground rent was £65 invoiced every twelve months. The lease ran out on 6 May 2085. Having 60 years left we calculated the premium to the freeholder to extend the lease to be within £20,900 and £24,200 plus legals.