It’s a harsh certainty that a Colwall residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Colwall property prices.Once your lease gets to 85ish years, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips under 80 years - otherwise a higher premium will be payable. The majority of leasehold owners in Colwall will be able to extend under the legislation; however a conveyancer should be able to confirm if you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer for the duration of the process.
Leasehold residencies in Colwall with in excess of 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth 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 merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in Colwall,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Colwall valuers.
Last Autumn Ben, came critically near to the eighty-year threshold with the lease on his ground floor apartment in Colwall. In buying his property 19 years ago, the unexpired term was of no bearing. Fortunately, it dawned on him that he would imminently be paying way over the odds for Extending the lease. Ben was able to extend his lease just under the wire last July. Ben and the landlord who owned the flat above in the end settled on the final figure of £6,000 . If the lease had slid below 80 years, the price would have increased by a minimum £1,150.
In 2011 we were phoned by Mr and Mrs. D Lee who, having owned a basement apartment in Colwall in October 1998. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by ninety years. Similar homes in Colwall with an extended lease were worth £300,000. The average amount of ground rent was £50 invoiced monthly. The lease ran out in 2100. Given that there were 75 years left we estimated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including expenses.
In 2013 we were phoned by Mrs Isabelle Nguyen who, having purchased a ground floor flat in Colwall in August 2010. The dilemma was if we could approximate the compensation to the landlord would be to prolong the lease by 90 years. Identical premises in Colwall with a long lease were valued around £250,400. The mid-range ground rent payable was £65 invoiced annually. The lease finished on 4 October 2089. Taking into account 64 years remaining we approximated the compensation to the freeholder for the lease extension to be between £19,000 and £22,000 plus costs.