Unfortunately that a Gloucester residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Gloucester property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If the number of years remaining slips under eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of flat owners in Gloucester will be able to extend under the legislation; however a conveyancer will be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor throughout the process.
Leasehold properties in Gloucester with in excess of one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges justify it.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| 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 |
Irrespective of whether you are a tenant or a freeholder in Gloucester,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Gloucester valuers.
Half a year ago Ryan, started to get close to the 80-year mark with the lease on his purpose- built apartment in Gloucester. In buying his home 19 years previously, the lease term was of little interest. As luck would have it, he noticed he would imminently be paying an inflated amount for a lease extension. Ryan was able to extend his lease at the eleventh hour in July. Ryan and the freeholder via the management company subsequently agreed on a premium of £5,000 . If he not met the deadline, the sum would have gone up by at least £975.
Last Spring we were called by Dr George Mason , who moved into a purpose-built flat in Gloucester in February 2000. We are asked if we could approximate the premium could be for a 90 year extension to my lease. Similar flats in Gloucester with a long lease were worth £240,600. The average amount of ground rent was £65 invoiced per annum. The lease expired on 18 October 2088. Given that there were 62 years remaining we calculated the compensation to the freeholder to extend the lease to be between £21,900 and £25,200 plus costs.
In 2014 we were approached by Mr and Mrs. D Clarke who, having completed a purpose-built flat in Gloucester in February 2005. The question was if we could shed any light on how much (roughly) premium would likely be for a 90 year lease extension. Comparative residencies in Gloucester with a long lease were worth £181,600. The average ground rent payable was £55 invoiced annually. The lease lapsed on 22 February 2078. Given that there were 52 years left we approximated the compensation to the landlord to extend the lease to be within £30,400 and £35,200 plus professional charges.