The market value of Cinderford leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase materialy once the unexpired lease term is less than eighty years
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the residence will be worth the same as a freehold for many years ahead.
| 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 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; |
| Chelsea 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with procure Cinderford 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.
Kyle owned a 2 bedroom flat in Cinderford on the market with a lease of a little over fifty eight years remaining. Kyle on an informal basis approached his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Kyle to invoke his statutory right. Kyle procured expert legal guidance and was able to make an informed decision and handle with the matter and ending up with a market value flat.
Dr Elizabeth Johnson owned a purpose-built apartment in Cinderford in March 1999. The dilemma was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparative properties in Cinderford with a long lease were in the region of £261,600. The mid-range amount of ground rent was £60 billed per annum. The lease end date was on 23 August 2078. Considering the 52 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £39,000 and £45,000 exclusive of expenses.
In 2011 we were contacted by Mr and Mrs. J Wood who, having bought a first floor flat in Cinderford in January 1997. We are asked if we could shed any light on how much (roughly) price could be for a 90 year extension to my lease. Comparative premises in Cinderford with 100 year plus lease were worth £218,000. The mid-range amount of ground rent was £45 invoiced quarterly. The lease expiry date was on 12 August 2089. Considering the 63 years remaining we calculated the compensation to the landlord to extend the lease to be within £17,100 and £19,800 plus legals.