Chances are that if you own a flat in Cholsey you actually own a long leasehold interest over your property
Leasehold properties in Cholsey with in excess of 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 premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges warrant it.
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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 conveyancing solicitors that we work with handle Cholsey 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 conveyancing solicitor we work with provide it.
Last year Eliot, started to get near to the 80-year mark with the lease on his first floor flat in Cholsey. Having bought his flat 18 years ago, the lease term was of little interest. Luckily, it dawned on him that he needed to take action soon on Extending the lease. Eliot arranged for a lease extension at the eleventh hour last June. Eliot and the landlord who owned the flat above ultimately settled on the final figure of £6,000 . If he had missed the deadline, the figure would have increased by a minimum £1,025.
Last year we were phoned by Dr E Thompson , who bought a one bedroom flat in Cholsey in March 1998. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparable properties in Cholsey with 100 year plus lease were valued around £210,600. The average amount of ground rent was £45 invoiced quarterly. The lease concluded in 2088. Having 62 years as a residual term we approximated the compensation to the landlord for the lease extension to be within £18,100 and £20,800 not including costs.
Last Autumn we were called by Dr G Anderson , who purchased a first floor apartment in Cholsey in February 2012. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by 90 years. Comparable homes in Cholsey with a long lease were worth £260,000. The average ground rent payable was £50 collected every twelve months. The lease concluded in 2099. Having 73 years outstanding we calculated the premium to the landlord to extend the lease to be within £9,500 and £11,000 not including professional charges.