There is no doubt about it a leasehold flat or house in Tewkesbury is a wasting asset as a result of the diminishing lease term. Where the residual term has, over one hundred years to run then this decrease may be of little impact nevertheless there will become a point in time when a lease has under than 80 years left as part of the premium you will incur is what is known as a marriage value. This could increase sharply the cost. It is the main rational as to why you should consider extending sooner rather than later. The majority of flat owners in Tewkesbury will meet the qualifying criteria; that being said a conveyancing solicitor should be able to advise if you qualify for a lease extension. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
Leasehold properties in Tewkesbury with over one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Retaining our service will provide you enhanced control over the value of your Tewkesbury leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Lucas, came dangerously close to the 80-year threshold with the lease on his basement flat in Tewkesbury. Having purchased his property twenty years ago, the length of the lease was of no bearing. by good luck, he noticed he would imminently be paying an escalated premium for a lease extension. Lucas arranged for a lease extension just under the wire in September. Lucas and the landlord eventually agreed on sum of £6,000 . If he had missed the deadline, the sum would have gone up by a minimum £950.
In 2012 we were approached by Mr and Mrs. B Patel who, having bought a first floor apartment in Tewkesbury in July 2012. We are asked if we could shed any light on how much (roughly) premium could be to extend the lease by 90 years. Comparable residencies in Tewkesbury with an extended lease were valued about £285,000. The average amount of ground rent was £45 invoiced monthly. The lease came to a finish on 27 November 2097. Taking into account 72 years left we calculated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 exclusive of fees.
Last Autumn we were contacted by Dr M Adams , who acquired a studio flat in Tewkesbury in July 2012. The dilemma was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Similar properties in Tewkesbury with a long lease were in the region of £233,200. The average amount of ground rent was £60 collected quarterly. The lease finished on 8 October 2086. Taking into account 61 years remaining we estimated the premium to the landlord to extend the lease to be within £22,800 and £26,400 plus professional charges.