Gloucester 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 your lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Gloucester residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Gloucester you must check if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is generally considered that a residential leasehold with over 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| 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; |
| 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. |
| 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a landlord in Gloucester,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Gloucester valuers.
Last October Finn, started to get near to the eighty-year mark with the lease on his two bedroom flat in Gloucester. Having bought his property 19 years previously, the length of the lease was of no interest. Thankfully, he noticed he needed to take steps soon on Extending the lease. Finn extended the lease at the eleventh hour in June. Finn and the landlord subsequently agreed on an amount of £5,500 . If the lease had descended below 80 years, the price would have become more exhorbitant by a minimum £850.
In 2009 we were called by Mr and Mrs. D Flores who, having moved into a garden apartment in Gloucester in September 2007. The question was if we could estimate the premium would be to prolong the lease by an additional years. Identical flats in Gloucester with an extended lease were in the region of £200,000. The mid-range amount of ground rent was £50 collected monthly. The lease concluded in 2103. Taking into account 77 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of legals.
Last Summer we were e-mailed by Ms J Bernard , who bought a basement flat in Gloucester in May 1998. The question was if we could estimate the compensation to the landlord could be for a ninety year lease extension. Comparative properties in Gloucester with a long lease were valued around £260,200. The mid-range amount of ground rent was £65 billed yearly. The lease came to a finish on 24 February 2092. Given that there were 66 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £16,200 and £18,600 plus fees.