The market value of a leasehold property in Cambridge is impacted by how long the lease has remaining. If it is near to or fewer than 80 years you should expect difficulties on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. It is ideal to start the process of extending the lease is when a lease still has 82 years remaining so that all matters can be addressed ahead of the eighty year threshold. Statute entitles Cambridge qualifying lessees to an additional term of 90 years on top of the unexpired term, at a nominal rent (zero ground rent). The intention of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Cambridge with in excess of 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake Cambridge 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.
Trailing unsuccessful discussions with the landlord of her studio flat in Cambridge, Olivia initiated the lease extension process as the 80 year deadline was swiftly coming. The lease extension was finalised in February 2008. The landlord’s fees were kept to an absolute minimum.
In 2013 we were phoned by Dr Ryan Rivera who, having took over the lease of a one bedroom flat in Cambridge in March 2005. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by an additional years. Similar flats in Cambridge with 100 year plus lease were worth £285,000. The mid-range amount of ground rent was £55 invoiced every twelve months. The lease came to a finish on 11 August 2104. Taking into account 80 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of expenses.
Last month we were approach by Mr Seth Johnson , who was assigned a lease of a garden flat in Cambridge in August 2010. We are asked if we could shed any light on how much (roughly) price would likely be to prolong the lease by 90 years. Similar residencies in Cambridge with 100 year plus lease were valued about £200,800. The mid-range ground rent payable was £65 billed annually. The lease terminated on 4 June 2084. Having 60 years remaining we approximated the compensation to the freeholder for the lease extension to be within £20,900 and £24,200 exclusive of legals.