There is no doubt about it a leasehold flat or house in Cirencester is a wasting asset as a result of the shortening lease. Where the lease has, in excess of 99 years remaining then this decrease may be fractional nevertheless there will become a point in time when a lease has fewer than 80 years remaining as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main reason why you should consider extending without delay. The majority of flat owners in Cirencester will meet the qualifying criteria; that being said a conveyancing solicitor should be able to advise whether you are eligible to extend your lease. In certain situations you may not qualify, the most common reason being that you have owned the property for less than two years.
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 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. |
| Halifax | Minimum 70 years from the date 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 |
Lease extensions in Cirencester can be a difficult process. We recommend you obtain guidance 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.
Subsequent to lengthy discussions with the landlord of her ground floor flat in Cirencester, Freya started the lease extension process as the 80 year mark was quickly approaching. The lease extension completed in August 2009. The landlord’s fees were kept to an absolute minimum.
Last Autumn we were e-mailed by Mr M Bonnet , who bought a garden apartment in Cirencester in September 1998. The dilemma was if we could approximate the compensation to the landlord would be to extend the lease by 90 years. Similar properties in Cirencester with a long lease were valued about £168,800. The average amount of ground rent was £60 collected quarterly. The lease expiry date was on 7 October 2081. Considering the 55 years unexpired we approximated the premium to the freeholder for the lease extension to be between £31,400 and £36,200 plus fees.
Last September we were approach by Mr Hugo Pérez , who bought a purpose-built apartment in Cirencester in October 2009. We are asked if we could estimate the premium could be for a 90 year extension to my lease. Identical residencies in Cirencester with an extended lease were worth £235,200. The mid-range amount of ground rent was £45 invoiced annually. The lease finished in 2092. Taking into account 66 years remaining we approximated the premium to the landlord for the lease extension to be within £12,400 and £14,200 not including fees.