Gloucester leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Gloucester tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Gloucester you must see if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold residencies in Gloucester with over one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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. |
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 relation to the lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Toby was the the leasehold owner of a conversion flat in Gloucester on the market with a lease of a little over 61 years unexpired. Toby on an informal basis contacted his freeholder being a well known London-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Toby to invoke his statutory right. Toby procured expert legal guidance and secured satisfactory resolution without going to tribunal and ending up with a market value flat.
Last year we were e-mailed by Mrs A Moreau , who moved into a ground floor apartment in Gloucester in June 2011. The question was if we could approximate the price would be to extend the lease by ninety years. Identical flats in Gloucester with a long lease were valued about £171,800. The mid-range amount of ground rent was £55 invoiced every twelve months. The lease came to a finish in 2075. Taking into account 50 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £32,300 and £37,400 not including legals.
Mr B Mason moved into a studio flat in Gloucester in January 2007. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to prolong the lease by an additional years. Comparative properties in Gloucester with a long lease were in the region of £280,000. The mid-range ground rent payable was £45 billed per annum. The lease lapsed on 18 March 2096. Given that there were 71 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 not including legals.