It’s a harsh truth that a Cotham residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Cotham property prices.Once your lease gets to 85ish years, you need to start thinking about 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 falls under eighty years - otherwise a higher amount will be payable. Most flat owners in Cotham will be able to extend under the legislation; however a conveyancer should be able to clarify if you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 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. |
Retaining our service gives you better control over the value of your Cotham leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 9 months of lengthy negotiations with the landlord of her garden apartment in Cotham, Abbie commenced the lease extension process just as her lease was coming close to the crucial eighty-year threshold. The transaction completed in June 2006. The freeholder’s costs were negotiated to under 700 pounds.
Mr and Mrs. E King took over the lease of a one bedroom flat in Cotham in February 2008. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by an additional years. Identical premises in Cotham with 100 year plus lease were valued about £260,000. The mid-range amount of ground rent was £50 collected yearly. The lease elapsed on 9 April 2099. Having 73 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 plus professional charges.
In 2010 we were e-mailed by Mrs Kirsty Khan who, having acquired a studio apartment in Cotham in March 2012. We are asked if we could shed any light on how much (roughly) price could be for a 90 year lease extension. Similar premises in Cotham with a long lease were worth £261,600. The average amount of ground rent was £60 invoiced annually. The lease elapsed on 2 September 2078. Considering the 52 years remaining we estimated the premium to the freeholder for the lease extension to be within £39,000 and £45,000 not including professional charges.