Cotswolds leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Cotswolds residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Cotswolds you should check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the cost of any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with over 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years left, the residence 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service will provide you better control over the value of your Cotswolds leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Jonathan owned a high value apartment in Cotswolds on the market with a lease of fraction over 72 years remaining. Jonathan informally spoke with his landlord a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Jonathan to exercise his statutory right. Jonathan procured expert legal guidance and was able to make an informed decision and deal with the matter and readily saleable.
Ms Leah Allen completed a newly refurbished apartment in Cotswolds in September 2003. The question was if we could estimate the premium would be for a ninety year lease extension. Identical residencies in Cotswolds with an extended lease were valued about £254,200. The mid-range ground rent payable was £60 billed yearly. The lease expired on 27 July 2076. Given that there were 51 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £43,700 and £50,600 plus legals.
Last month we were contacted by Mr R Laurent , who owned a one bedroom apartment in Cotswolds in January 2002. We are asked if we could approximate the premium would be to extend the lease by a further 90 years. Similar premises in Cotswolds with a long lease were in the region of £210,600. The average amount of ground rent was £45 collected monthly. The lease came to a finish in 2087. Considering the 62 years unexpired we estimated the premium to the freeholder for the lease extension to be between £18,100 and £20,800 exclusive of costs.