It’s an underpublicised truth that a Tewkesbury residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Tewkesbury property market.Once your lease gets to 85ish years, 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 lower than 80 years - otherwise a higher premium will be due. Most flat owners in Tewkesbury will be able to extend under the legislation; however a lawyer will be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 45 years unexpired, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide you better control over the value of your Tewkesbury leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Ali, came perilously close to the 80-year threshold with the lease on his two bedroom flat in Tewkesbury. Having purchased his property two decades ago, the length of the lease was of minimal importance. by good luck, he noticed he would imminently be paying an inflated amount for Extending the lease. Ali extended the lease just under the wire in March. Ali and the freeholder via the managing agents ultimately agreed on sum of £5,500 . If the lease had slid below eighty years, the sum would have gone up by at least £1,150.
Last Summer we were contacted by Ms Natasha Wright , who took over the lease of a basement apartment in Tewkesbury in January 1999. We are asked if we could approximate the price would be to extend the lease by 90 years. Comparable flats in Tewkesbury with a long lease were worth £295,000. The mid-range amount of ground rent was £45 collected yearly. The lease ran out in 2100. Given that there were 74 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 not including professional charges.
In 2013 we were phoned by Mr and Mrs. H Norbert who, having owned a basement flat in Tewkesbury in February 2007. We are asked if we could estimate the price would likely be to extend the lease by 90 years. Comparable properties in Tewkesbury with 100 year plus lease were valued about £243,000. The mid-range ground rent payable was £65 collected monthly. The lease terminated on 19 July 2089. Given that there were 63 years unexpired we estimated the premium to the freeholder to extend the lease to be between £20,000 and £23,000 not including costs.