Unfortunately that a Gloucester residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Gloucester property market.Where your lease has approximately ninety years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under 80 years - otherwise a higher amount will be due. Most leasehold owners in Gloucester will be able to extend under the legislation; however a conveyancer will be able to confirm whether you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your lawyer from beginning to end of the formalities.
It is generally accepted that a property with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as 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; |
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
Using our service will provide you enhanced control over the value of your Gloucester leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Riley owned a conversion flat in Gloucester being marketed with a lease of just over 72 years remaining. Riley informally approached his freeholder a well known Bristol-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Riley to invoke his statutory right. Riley procured expert legal guidance and secured an acceptable resolution without resorting to tribunal and ending up with a market value flat.
Dr D Miller purchased a ground floor flat in Gloucester in November 2004. The dilemma was if we could approximate the price would likely be to extend the lease by an additional years. Similar residencies in Gloucester with a long lease were worth £295,000. The average amount of ground rent was £45 invoiced every twelve months. The lease expired in 2101. Having 75 years left we estimated the premium to the landlord to extend the lease to be between £8,600 and £9,800 plus fees.
In 2011 we were called by Ms T Ward who, having completed a ground floor apartment in Gloucester in June 2003. The dilemma was if we could estimate the price could be to extend the lease by ninety years. Comparable premises in Gloucester with an extended lease were in the region of £250,400. The average amount of ground rent was £65 billed quarterly. The lease ended on 20 February 2090. Given that there were 64 years as a residual term we calculated the premium to the landlord for the lease extension to be between £19,000 and £22,000 not including legals.