Gloucester leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Gloucester residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Gloucester you should investigate if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is generally accepted that a residential leasehold with over 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
|Barclays plc|| Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below).|
Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office.
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.|
|Leeds Building Society||85 years remaing from the start of the mortgage.|
|Lloyds TSB Scotland||Minimum 70 years from the date of the mortgage.|
|Virgin||85 years at the time of completion. If it's less, we require it to be extended on or before completion.|
The conveyancers that we work with procure Gloucester 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 conveyancer we work with provide it.
During the course of the last few months Max, started to get near to the eighty-year threshold with the lease on his garden apartment in Gloucester. In buying his property 19 years previously, the length of the lease was of no significance. As luck would have it, it dawned on him that he needed to take action soon on Extending the lease. Max was able to extend his lease just ahead of time in June. Max and the freeholder subsequently agreed on the final figure of £6,000 . If he failed to meet the deadline, the figure would have escalated by a minimum £875.
In 2013 we were called by Mrs Y Roberts who, having moved into a purpose-built flat in Gloucester in November 2011. The question was if we could estimate the price would likely be to extend the lease by 90 years. Comparable residencies in Gloucester with an extended lease were in the region of £243,000. The mid-range amount of ground rent was £65 invoiced yearly. The lease expired in 2085. Given that there were 63 years outstanding we estimated the premium to the landlord for the lease extension to be between £20,000 and £23,000 exclusive of costs.
Ms C Cook took over the lease of a garden apartment in Gloucester in April 2003. The dilemma was if we could approximate the price would likely be to extend the lease by a further 90 years. Similar properties in Gloucester with an extended lease were in the region of £181,600. The average ground rent payable was £55 collected per annum. The lease elapsed in 2074. Given that there were 52 years left we calculated the compensation to the freeholder to extend the lease to be within £30,400 and £35,200 exclusive of costs.