As the the remaining lease term of a Colwall residential lease decreases so does its value and therefore the value of your property. If the lease has, more than 100 years remaining then this decrease may be negligible nevertheless there will become a point in time when a lease has fewer than eighty years remaining as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the main reason why you should extend the lease without delay. Many flat owners in Colwall will qualify for this right; nevertheless a conveyancing solicitor can advise whether you are eligible for a lease extension. In limited situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
Leasehold properties in Colwall with more than one hundred years outstanding 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 property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors 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.
Toby owned a high value apartment in Colwall being marketed with a lease of a little over fifty eight years outstanding. Toby on an informal basis approached his freeholder a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Toby to exercise his statutory right. Toby procured expert advice and secured satisfactory resolution informally and sell the flat.
Last Spring we were called by Mr and Mrs. L David , who completed a newly refurbished apartment in Colwall in May 2008. We are asked if we could shed any light on how much (roughly) premium could be to prolong the lease by ninety years. Identical homes in Colwall with 100 year plus lease were valued around £206,200. The average amount of ground rent was £60 invoiced quarterly. The lease ended on 26 November 2081. Taking into account 56 years left we approximated the compensation to the landlord to extend the lease to be between £31,400 and £36,200 exclusive of costs.
Dr Aimee François owned a purpose-built flat in Colwall in October 2008. The question was if we could approximate the premium would be to prolong the lease by a further 90 years. Comparable homes in Colwall with 100 year plus lease were worth £300,000. The average ground rent payable was £50 billed every twelve months. The lease expired on 8 January 2101. Given that there were 76 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 plus professional charges.