Cirencester leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Cirencester residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Cirencester you would be well advised to see if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold premises in Cirencester with over one hundred years outstanding on the lease are sometimes regarded as a ‘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.
| Lender | Requirement |
|---|---|
| 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. |
| Godiva Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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 |
Using our service will provide you better control over the value of your Cirencester leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Isaac was the the leasehold proprietor of a studio flat in Cirencester being sold with a lease of just over fifty eight years unexpired. Isaac on an informal basis approached his freeholder being a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Isaac to exercise his statutory right. Isaac procured expert legal guidance and was able to make a more informed judgement and deal with the matter and sell the flat.
Last Winter we were approach by Dr Arthur Moreau , who was assigned a lease of a garden apartment in Cirencester in September 2010. We are asked if we could shed any light on how much (approximately) price could be to prolong the lease by a further 90 years. Comparable premises in Cirencester with 100 year plus lease were in the region of £260,000. The mid-range ground rent payable was £50 collected yearly. The lease expired in 2097. Given that there were 72 years remaining we calculated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including professional charges.
Last year we were phoned by Dr Rhiannon Petit , who acquired a ground floor flat in Cirencester in November 2001. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by 90 years. Identical flats in Cirencester with an extended lease were worth £256,600. The mid-range ground rent payable was £60 billed per annum. The lease finished in 2077. Considering the 52 years left we calculated the premium to the landlord to extend the lease to be between £39,000 and £45,000 not including legals.