If you are facing a significant premium because your lease in Cirencester has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Top reasons for lease extension now:
Increase your lease and increase your Cirencester property value
Cirencester leases on residential deteriorating in value. if your lease has approximately 90 years unexpired, you should start thinking about a lease extension. An important point to note is that it is desirable for the lease extension to be in place before the term of the existing lease dips below 80 years - otherwise a higher premium will be due. Flat owners in Cirencester will usually be legally entitled to a lease extension; however it’s a good idea to check with a conveyancing solicitor to check if you qualify. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process has started so it’s sensible to be guided by a conveyancer during the process.
Cirencester property with a lease extension is almost the same value as a freehold
Leasehold properties in Cirencester with over one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges merit it.
Mortgage lenders will not loan monies with a short lease
Lenders are making their criteria more stringent and many now want flats to have a minimum of 60 if not 70 years remaining once the mortgage has expired. Considering plenty of flats in Cirencester were created in the 1950s, 1960s and 1970s as a result many now require lease extensions if they if they are to be mortgageable.
| Lender |
Requirement
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| 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.
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| Birmingham Midshires |
Minimum 70 years from the date of the mortgage.
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| 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.
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| Halifax |
Minimum 70 years from the date of the mortgage.
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| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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What makes us experts in Cirencester lease extensions?
Lease extensions in Cirencester can be a difficult process. We recommend you procure professional help from a lawyer and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Cirencester lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Cirencester Lease Extension Example Cases:
Rosie, Cirencester, Gloucestershire,
In the wake of eight months of lengthy correspondence with the landlord of her two bedroom apartment in Cirencester, Rosie started the lease extension process just as her lease was nearing the crucial 80-year deadline. The lease extension completed in October 2012. The landlord’s charges were kept to an absolute minimum.
Cirencester case:
Last May we were e-mailed by Mr and Mrs. T Flores , who
took over the lease of a purpose-built flat in Cirencester in July 2001. We are asked if we could approximate the price would likely be to extend the lease by an additional years. Similar homes in Cirencester with 100 year plus lease were valued about £250,000. The average ground rent payable was £50 billed monthly. The lease ran out on 7 March 2095. Given that there were 69 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of costs.
Cirencester case:
Mr D King owned a garden apartment in Cirencester in January 1999. The dilemma was if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Similar residencies in Cirencester with a long lease were worth £285,000. The mid-range amount of ground rent was £55 billed quarterly. The lease came to a finish on 6 September 2106. Considering the 80 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 not including legals.