Cirencester leases on residential deteriorating in value. Where your lease has in the region of 90 years left, you should start thinking about a lease extension. 80 years is a significant number: when the remaining term of a lease dips below this level then you begin paying an additional element called marriage value. Flat owners in Cirencester will usually be legally entitled to a lease extension; however a solicitor will check if you qualify. In certain situations you may not be entitled. There are also strict deadlines and procedures to follow once the process is initiated so it’s prudent to be guided by a conveyancer during the process.
It is generally considered that a property with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in Cirencester,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Cirencester valuers.
Cameron owned a conversion flat in Cirencester being sold with a lease of just over 72 years left. Cameron on an informal basis approached his freeholder a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £50 per annum. Ordinarily, ground rent would not be payable on a lease extension were Cameron to exercise his statutory right. Cameron obtained expert advice and secured satisfactory deal informally and sell the flat.
In 2009 we were contacted by Mr P Martinez who, having bought a ground floor apartment in Cirencester in August 2001. We are asked if we could shed any light on how much (roughly) premium would likely be for a 90 year lease extension. Identical premises in Cirencester with 100 year plus lease were worth £225,400. The mid-range ground rent payable was £45 billed annually. The lease end date was in 2089. Taking into account 64 years unexpired we calculated the premium to the landlord to extend the lease to be between £16,200 and £18,600 plus professional charges.
In 2013 we were contacted by Ms Aimee Martinez who, having bought a recently refurbished flat in Cirencester in September 2008. The question was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Identical homes in Cirencester with 100 year plus lease were in the region of £270,000. The average ground rent payable was £55 billed every twelve months. The lease ended in 2100. Having 75 years outstanding we approximated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of expenses.