Cotswolds leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now which entitles qualifying Cotswolds residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Cotswolds you must check if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with over one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Chelsea Building Society | 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. |
| 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. |
| 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. |
| Yorkshire Building Society | 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. |
Lease extensions in Cotswolds can be a difficult process. We recommend you secure professional help from a conveyancing solicitor and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Cotswolds lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Following unsuccessful negotiations with the landlord of her first floor apartment in Cotswolds, Bethany initiated the lease extension process just as her lease was coming close to the critical eighty-year deadline. The transaction completed in February 2011. The freeholder’s costs were restricted to approximately four hundred GBP.
In 2010 we were called by Ms Ella García who, having was assigned a lease of a one bedroom flat in Cotswolds in July 2004. We are asked if we could approximate the premium would likely be for a ninety year lease extension. Similar homes in Cotswolds with an extended lease were in the region of £168,800. The average amount of ground rent was £60 invoiced every twelve months. The lease terminated in 2080. Having 55 years unexpired we calculated the premium to the freeholder for the lease extension to be within £31,400 and £36,200 exclusive of costs.
Last Summer we were approach by Mr and Mrs. C Richardson , who completed a one bedroom apartment in Cotswolds in May 2008. The dilemma was if we could estimate the price would be for a ninety year extension to my lease. Identical flats in Cotswolds with a long lease were in the region of £235,200. The mid-range ground rent payable was £45 billed quarterly. The lease ran out on 19 October 2091. Considering the 66 years as a residual term we calculated the premium to the landlord to extend the lease to be between £12,400 and £14,200 plus legals.