When it comes to residential leasehold premises in Coleshill, you are actually buying an entitlement to live in a property for a set period of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you should consider extending the lease sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately greater notably once there are fewer than 80 years remaining. Leasehold owners in Coleshill with a lease drawing near to 81 years left should seriously consider extending it without delay. Once the lease term has less than eighty years outstanding, under the relevant statute the freeholder can calculate and charge a greater premium, based on a technical computation, known as “marriage value” which is due.
Leasehold properties in Coleshill with in excess of one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| 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; |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 will provide you enhanced control over the value of your Coleshill leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Ryan owned a studio apartment in Coleshill on the market with a lease of a little over fifty eight years outstanding. Ryan informally contacted his freeholder a well known Bristol-based freehold company for a lease extension. The landlord 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 increase every 25 years thereafter. No ground rent would be payable on a lease extension were Ryan to exercise his statutory right. Ryan obtained expert advice and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
In 2009 we were e-mailed by Mr and Mrs. R Stewart who, having bought a one bedroom flat in Coleshill in January 1999. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be to extend the lease by ninety years. Similar properties in Coleshill with 100 year plus lease were in the region of £233,200. The average amount of ground rent was £60 collected yearly. The lease concluded on 18 October 2087. Taking into account 61 years as a residual term we estimated the premium to the landlord to extend the lease to be between £22,800 and £26,400 exclusive of legals.
In 2010 we were e-mailed by Mr and Mrs. R Lambert who, having bought a purpose-built apartment in Coleshill in April 2000. We are asked if we could estimate the premium would be for a 90 year extension to my lease. Comparative homes in Coleshill with a long lease were worth £171,800. The average amount of ground rent was £55 invoiced annually. The lease terminated on 3 May 2076. Considering the 50 years remaining we approximated the compensation to the freeholder for the lease extension to be between £32,300 and £37,400 plus professional charges.