Cotswolds leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. The majority of owners of residential leasehold property in Cotswolds enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Cotswolds you would be well advised to see if your lease has between seventy and 90 years left. There are compelling reasons why a Cotswolds leaseholder with a lease having around eighty years left should take steps to ensure that a lease extension is effected without delay
Leasehold properties in Cotswolds with in excess of 100 years outstanding on the lease are often referred to as ‘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 purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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. |
| 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. |
Using our service gives you better control over the value of your Cotswolds leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to lengthy negotiations with the landlord of her basement apartment in Cotswolds, Zoe commenced the lease extension process as the eighty year mark was quickly coming. The lease extension completed in July 2015. The freeholder’s fees were negotiated to slightly above 500 pounds.
In 2009 we were contacted by Dr R Torres who, having completed a basement flat in Cotswolds in February 1995. The question was if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by 90 years. Identical properties in Cotswolds with 100 year plus lease were worth £265,000. The average amount of ground rent was £50 invoiced every twelve months. The lease came to a finish in 2099. Considering the 73 years outstanding we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 not including costs.
Dr M André was assigned a lease of a one bedroom flat in Cotswolds in October 2003. The question was if we could estimate the premium would likely be to prolong the lease by ninety years. Comparable properties in Cotswolds with 100 year plus lease were in the region of £264,000. The mid-range amount of ground rent was £60 invoiced monthly. The lease finished in 2079. Considering the 53 years remaining we calculated the premium to the landlord to extend the lease to be within £37,100 and £42,800 exclusive of legals.