The market value of Colerne leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase materialy once the unexpired lease term is less than 80 years
Leasehold premises in Colerne with more than one hundred years left on the lease are sometimes 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 upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you better control over the value of your Colerne leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of eight months of unsuccessful discussions with the landlord of her ground floor flat in Colerne, Jordan commenced the lease extension process just as her lease was approaching the critical 80-year mark. The legal work completed in April 2013. The landlord’s fees were negotiated to approximately 550 pounds.
In 2014 we were phoned by Mr and Mrs. U Simon who, having acquired a ground floor apartment in Colerne in March 2012. We are asked if we could estimate the premium would be to prolong the lease by ninety years. Identical properties in Colerne with 100 year plus lease were valued around £201,200. The average amount of ground rent was £55 invoiced quarterly. The lease ran out on 23 November 2082. Given that there were 56 years left we approximated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 exclusive of costs.
Mr and Mrs. R Brown purchased a purpose-built apartment in Colerne in January 2010. We are asked if we could estimate the compensation to the landlord would be to extend the lease by 90 years. Identical premises in Colerne with an extended lease were valued around £300,000. The average ground rent payable was £50 billed per annum. The lease ended on 26 September 2102. Given that there were 76 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 not including professional charges.