Unfortunately that a Tetbury residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Tetbury property prices.Where your lease has approximately 90 years left, you need to 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 lower than eighty years - otherwise a higher premium will be due. The majority of flat owners in Tetbury will be able to extend under the legislation; however a conveyancer should be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
It is generally accepted that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the residence will be worth the same as a freehold for many years in the future.
| 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. |
| 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; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Yorkshire 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. |
Engaging our service gives you better control over the value of your Tetbury leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Jackson owned a studio flat in Tetbury being sold with a lease of fraction over sixty years remaining. Jackson on an informal basis spoke with his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £50 annually. No ground rent would be payable on a lease extension were Jackson to invoke his statutory right. Jackson procured expert advice and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
In 2012 we were approached by Mr and Mrs. E Watson who, having acquired a one bedroom flat in Tetbury in April 1999. The question was if we could estimate the premium would be for a 90 year lease extension. Comparative flats in Tetbury with 100 year plus lease were valued around £280,000. The mid-range ground rent payable was £55 collected quarterly. The lease elapsed on 28 February 2104. Given that there were 78 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 plus fees.
Last Autumn we were phoned by Dr M Wright , who acquired a one bedroom flat in Tetbury in November 1997. We are asked if we could approximate the premium would be to prolong the lease by a further 90 years. Comparative homes in Tetbury with an extended lease were valued around £186,000. The mid-range amount of ground rent was £65 invoiced yearly. The lease lapsed in 2084. Considering the 58 years as a residual term we calculated the premium to the landlord to extend the lease to be between £24,700 and £28,600 not including professional charges.