It’s an underpublicised certainty that a Tewkesbury residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Tewkesbury property market.Where your lease has approximately 90 years left, you need to start considering a lease extension. If the number of years remaining falls below eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most flat owners in Tewkesbury will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
The lawyers that we work with undertake Tewkesbury 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.
Jayden was the the leasehold proprietor of a studio apartment in Tewkesbury on the market with a lease of just over 61 years outstanding. Jayden on an informal basis contacted his landlord being a well known London-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Jayden to invoke his statutory right. Jayden procured expert advice and was able to make a more informed judgement and deal with the matter and sell the property.
In 2009 we were e-mailed by Mr and Mrs. A Morel who, having purchased a ground floor flat in Tewkesbury in March 2002. The dilemma was if we could shed any light on how much (approximately) premium would be for a 90 year extension to my lease. Comparable premises in Tewkesbury with an extended lease were valued about £250,400. The mid-range amount of ground rent was £65 invoiced every twelve months. The lease terminated in 2089. Considering the 64 years outstanding we calculated the premium to the freeholder for the lease extension to be between £19,000 and £22,000 not including professional charges.
In 2014 we were approached by Mr Andrew Miller who, having acquired a first floor flat in Tewkesbury in July 2001. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Similar homes in Tewkesbury with an extended lease were valued around £189,000. The mid-range amount of ground rent was £55 billed per annum. The lease lapsed on 4 June 2078. Taking into account 53 years outstanding we approximated the premium to the landlord to extend the lease to be between £28,500 and £33,000 exclusive of costs.