Unfortunately that a Cirencester residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Cirencester property prices.Once your lease nears 85ish years, you should start thinking about a lease extension. If the number of years remaining falls under eighty years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of flat owners in Cirencester will be able to extend under the legislation; however a conveyancer will be able to clarify whether you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
Leasehold residencies in Cirencester with more than 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service gives you better control over the value of your Cirencester leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Harry, came critically close to the eighty-year threshold with the lease on his garden flat in Cirencester. Having purchased his flat twenty years previously, the unexpired term was of minimal importance. Thankfully, it dawned on him that he needed to take steps soon on Extending the lease. Harry arranged for a lease extension at the eleventh hour last May. Harry and the landlord subsequently agreed on the final figure of £5,500 . If he failed to meet the deadline, the figure would have escalated by at least £975.
In 2009 we were phoned by Dr C Khan who, having took over the lease of a one bedroom apartment in Cirencester in April 1996. The question was if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparable flats in Cirencester with a long lease were in the region of £218,000. The mid-range ground rent payable was £45 collected monthly. The lease expired in 2089. Given that there were 63 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £17,100 and £19,800 plus professional charges.
Ms D Nelson completed a first floor flat in Cirencester in February 2001. The question was if we could estimate the premium would be to extend the lease by a further 90 years. Comparative flats in Cirencester with a long lease were valued about £265,000. The mid-range ground rent payable was £55 billed quarterly. The lease end date was in 2100. Taking into account 74 years as a residual term we calculated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus legals.