Colwall 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. The majority of owners of residential leasehold property in Colwall enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Colwall you really ought to check if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
Leasehold properties in Colwall with in excess of one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset 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. |
| Yorkshire 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. |
The conveyancers that we work with procure Colwall lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Callum owned a conversion flat in Colwall being sold with a lease of fraction over fifty eight years remaining. Callum on an informal basis contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Callum to exercise his statutory right. Callum procured expert legal guidance and secured an acceptable resolution without resorting to tribunal and sell the flat.
Last Autumn we were called by Mrs Leah Bernard , who took over the lease of a ground floor flat in Colwall in October 1995. We are asked if we could approximate the price would be for a 90 year lease extension. Identical flats in Colwall with 100 year plus lease were in the region of £233,200. The average ground rent payable was £60 billed yearly. The lease came to a finish in 2087. Having 61 years as a residual term we calculated the premium to the landlord for the lease extension to be within £22,800 and £26,400 plus costs.
Last Winter we were e-mailed by Mr and Mrs. U Evans , who bought a ground floor apartment in Colwall in October 2002. We are asked if we could estimate the compensation to the landlord would be to extend the lease by ninety years. Comparative properties in Colwall with an extended lease were in the region of £171,800. The mid-range amount of ground rent was £55 collected yearly. The lease end date was on 13 January 2076. Considering the 50 years left we estimated the premium to the freeholder for the lease extension to be between £32,300 and £37,400 not including legals.