Tewkesbury leases on domestic properties are gradually losing value. Where your lease has approximately ninety years left, you should start thinking about a lease extension. An important point to note is that it is financially advisable for a lease extension to take place before the term of the current lease dips under 80 years - otherwise a higher premium will be payable. Flat owners in Tewkesbury will usually qualify for a lease extension; however a solicitor will check if you qualify. In some cases you may not be entitled. There are also strict deadlines and formalities to follow once the process is triggered so it’s wise to be guided by a conveyancing solicitor during the process.
It is generally considered that a property with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years unexpired, the residence 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. |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Tewkesbury,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Tewkesbury valuers.
Last October Samuel, came critically close to the eighty-year threshold with the lease on his leasehold apartment in Tewkesbury. In buying his flat 19 years ago, the unexpired term was of little relevance. Thankfully, he realised he would imminently be paying an escalated premium for Extending the lease. Samuel was able to extend his lease just under the wire last January. Samuel and the landlord in the end settled on a premium of £5,500 . If the lease had slid lower than eighty years, the amount would have gone up by a minimum £1,000.
Mr and Mrs. S Girard owned a basement apartment in Tewkesbury in April 1997. The question was if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Comparative flats in Tewkesbury with an extended lease were valued about £233,200. The mid-range ground rent payable was £60 collected quarterly. The lease expired on 7 November 2086. Given that there were 61 years as a residual term we calculated the premium to the landlord to extend the lease to be within £22,800 and £26,400 plus legals.
In 2014 we were e-mailed by Mr and Mrs. N Díaz who, having owned a studio apartment in Tewkesbury in June 2002. The question was if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year lease extension. Comparative flats in Tewkesbury with an extended lease were in the region of £171,800. The average ground rent payable was £55 invoiced monthly. The lease concluded in 2075. Having 50 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £32,300 and £37,400 plus costs.