Cotswolds residential property held on a long lease is a depreciating asset as the leaseholder merely owns the property for a set term.
Leasehold residencies in Cotswolds with in excess of one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance 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 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
The conveyancing solicitors that we work with handle Cotswolds 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.
Harrison owned a conversion flat in Cotswolds being sold with a lease of a little over 59 years unexpired. Harrison informally spoke with his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £100 per annum. No ground rent would be payable on a lease extension were Harrison to invoke his statutory right. Harrison obtained expert legal guidance and secured satisfactory resolution without resorting to tribunal and sell the property.
Last Christmas we were called by Mr and Mrs. Y Gray , who owned a basement flat in Cotswolds in April 2010. We are asked if we could shed any light on how much (approximately) price could be for a 90 year lease extension. Identical properties in Cotswolds with a long lease were valued about £210,600. The average amount of ground rent was £45 collected annually. The lease concluded on 22 August 2088. Having 62 years remaining we estimated the premium to the freeholder to extend the lease to be within £18,100 and £20,800 plus costs.
Last Spring we were phoned by Mr I Vincent , who completed a one bedroom apartment in Cotswolds in October 2012. The dilemma was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Identical properties in Cotswolds with 100 year plus lease were worth £265,000. The mid-range amount of ground rent was £50 invoiced annually. The lease concluded in 2099. Given that there were 73 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 not including costs.